Congress targeted the Modi government over the Atal Pension Scheme, to which Finance Minister Nirmala Sitharaman gave a befitting reply.
A heated debate has erupted between Finance Minister of the Union Nirmala Sitharaman as well as Congress Chairman Jairam Ramesh regarding the Atal Pension Yojana.
On one hand, the Finance Minister praised the Atal Pension Scheme, while on the other hand, the Congress leader has made allegations regarding it. He said that the FM did not mention that 83 percent of the subscribers of the scheme fall in the lowest pension slab i.e. Rs 1000.
Finance Minister Nirmala Sitharaman’s counterattack on Congress leader Jairam Ramesh’s allegations on Atal Pension Yojana.
Trying To Hide the Wrong Figures?
The Finance Minister said that Jairam Ramesh is trying to hide wrong figures and facts. Questioning the understanding of Jairam Ramesh, he said that he does not even have basic knowledge of this scheme.
forced to join the scheme
Ramesh claimed that the amount of returns is not very attractive for customers.
Referring to a study conducted by the Indian Council of Social Science Research and the Indian Council of Social Science Research, he stated that about one-third of subscribers were excluded from the pension scheme as the accounts they had were created without explicit consent.
He claimed that a third of the subscribers were forced to be included in this scheme.
Finance Minister replied
The Union Finance Minister denied these allegations. She replied to this through his social media account. The Finance Minister mentioned many important points about APY.
She said that this scheme provides at least 8 percent returns.
If there is any shortage, the government also gives a subsidy to PFRDA for it. Under APY, the pensioner is guaranteed at least an 8 percent return.
To fulfill the guarantee of an 8 percent return, the government also gives a subsidy to PFRDA.
At present, more than 8 percent return is being given on APY (Atal Pension Yojana Interest Rate). In APY the premium payment is made automatically.
The system was developed with the interest of the clients. Customers get the benefit of higher pensions when they get higher returns on investment.
Which is the Best Pension Scheme?
Pension plans tend to provide long-term income that’s safer than investments in stocks or mutual funds, allowing you to leave money behind for your heirs.
Your ideal pension scheme depends on your unique personal and investment goals, with some preferring a traditional pension plan while others opting for greater flexibility with government plans.
Investing
Your choice of pension scheme will have a major impact on how much money you have saved for retirement.
Ideally, select one with an excellent track record and competitive charges as well as providing access to funds and tools that support more confident investors in making informed choices.
Ideally also seek a provider offering ethical, socially responsible, or Sharia-compliant investments.
Most defined contribution (or “money purchase”) pension plans offer various investment funds that are designed to spread your savings over the years until retirement.
They are managed by professional investment teams and the types of investments may vary according to each fund, such as company shares, property, or bonds.
Change the investments your pension is invested in can often be straightforward and inexpensive, although be wary if switching providers entails an exit fee from existing arrangements, potentially depriving yourself of guaranteed perks that have accrued during that time.
Self-Invested Personal Pensions (SIPPs), give you complete control over how your money is invested; however, to do this successfully you must possess both financial knowledge and confidence to manage the portfolio yourself.
Furthermore, costs for SIPPs may be higher than other simple personal pension options such as stakeholder plans.
Taxes
While pensions provide excellent retirement benefits, they also pose certain risks. Like all investment accounts, pension plans may be vulnerable to market downturns and subpar returns; they also run the risk of going bankrupt should their company owe the plan.
To mitigate risk and ensure maximum protection of funds for participants, many companies insure their pension plans through government programs; this helps minimize any chance of money loss.
However, pensions may also be subject to taxes and fees that eat away at your return. You can avoid these by selecting an investment scheme with tax-efficient structures and selecting investments with steady returns – low-risk equity funds, fixed-income investments or alternative assets are popular choices here.
Long-term savings schemes are designed for the long term and typically invest in stocks and bonds.
As with other stocks, their market fluctuation may be affected by economic trends and geopolitical events; but you can mitigate risk by selecting an asset allocation that best meets your age and risk tolerance needs.
Private pensions have gained in popularity recently thanks to auto-enrolment. Companies are legally required to provide pension plans for employees and automatically enroll them unless they choose to opt-out.
When setting up a personal pension plan, many factors need to be taken into consideration, including cost and tax relief opportunities available.
Drawdown
Pension drawdown allows you to take a regular income from your pension savings at any point after turning 55 (57 as of April 2028). Your withdrawal amount can be flexible; just remember that its value may go either up or down over time.
Withdrawals should be managed carefully to preserve as much value in your pot for as long as possible, and financial advice from an independent regulated advisor may help simplify this complex process.
Your investments can be chosen independently, or you may prefer using an investment pathway provider with ready-made options to simplify the decision-making process.
Diversifying risk by investing in various assets is another effective method. With our NPS online dashboard, it can also be easy to monitor how your funds perform over time.
If you are uncertain whether pension drawdown is suitable for you, book a free guidance appointment through Pension Wise for free guidance. Unfortunately, Pension Wise won’t tell you which providers or investments would best meet your needs; an independent financial adviser is more capable of helping to determine whether drawdown is the right option and helping determine how much should be taken from your pension pot.
Investment options
Investment decisions have a direct effect on how much your pension pot grows, so selecting wisely is key.
A well-designed pension scheme should allow for investments across a range of asset classes such as company shares and property – although some of them may be riskier than others; so before choosing one option, it is essential that you consider both your personal circumstances and risk tolerance before selecting any option.
Most defined contribution pension schemes provide you with a selection of investment funds that you can select, usually to help build up your pension pot over time and towards retirement.
These funds are managed by experts who will select investments with growth potential; such as UK companies or internationally-focused fund managers. Alternatively, you can opt to spread out your money between several managers.
If you lack the confidence to manage your pension investments, a ready-made option could be just what’s needed. These plans typically provide an array of options for investing while also being simple to manage.
For lower-risk options, self-invested personal pensions (SIPPs) might also be suitable, since these provide greater responsibility and higher contribution limits than standard plans while offering access to more assets.
Pradhan Mantri National Pension Scheme
What Is Pradhan Mantri National Pension Scheme (NPS)? The National Pension System (NPS) is an investment plan designed to provide you with a guaranteed monthly pension after retirement.
Administered by the Pension Fund Regulatory and Development Authority, investing in NPS can help save money since it’s tax-efficient; managing and moving it around if needed makes for smooth operations – no matter where life takes us!
NPS is available to individuals between 18 and 70 years of age.
Employees can make contributions via a deduction from their salary; traders, shopkeepers, and self-employed people can set up auto-debit facilities in their bank accounts or Jan Dhan accounts to contribute.
Your contributions will then be invested across various asset classes and generate returns; at retirement time your accumulated corpus will be used to purchase annuity plans that provide regular monthly pension payments.
After reaching age 60, you can withdraw up to 60% of your accumulated wealth under the National Pension System.
You have two options when withdrawing funds: either in one lump sum or through purchasing an annuity plan. Depending on which option you select, taxes may apply depending on your tax slab.
Registering to join the NPS can be done both online and by visiting your nearest Point of Presence (PoP).
After registration is complete, you will receive your Permanent Retirement Account Number (PRAN), which will remain active throughout your lifetime.