Government pension schemes every Indian should know about

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Planning for retirement often feels overwhelming, but government-backed pension schemes can smooth things over. These plans are designed to give financial stability when you get old. From the National Pension System to the Atal Pension Yojana, each scheme offers different benefits, tax savings, and security, helping Indians build a reliable safety net for their later years.

National Pension System (NPS)

National Pension System is a voluntary, long-term retirement saving scheme under the governance of Pension Fund Regulatory and Development Authority (PFRDA). NPS allows for monthly or yearly investment while being employed and to build a retirement corpus. You can contribute monthly, yearly, or in a lumpsum, and this corpus is then used to provide a pension at retirement. NPS offers tax benefit under Section 80C and Section 80CCD(1B) of the Income Tax Act and thus is commonly used for retirement fund saving.

Employees' Pension Scheme (EPS)

EPS is a social security scheme of the Employees' Provident Fund Organisation (EPFO) for working employees. Some of the employer contribution to EPF is diverted into EPS, which gives a pension every month in retirement, if the retiree has done a minimum of 10 years of service. The pension depends on years of service and the pensionable salary of the employee. EPS ensures a pension to the retiree, especially those who worked in the organised sector for long years.

Atal Pension Yojana (APY)

Atal Pension Yojana is a government-guaranteed pension plan for employees in the unorganised sector. It provides a guaranteed pension of Rs.1,000 to Rs.5,000 every month after age 60, depending upon the contribution made during the working life. The contribution would differ based on the age of joining and pension required. APY adds an extra layer of security for workers who do not have a proper retirement saving plan and qualifies for tax deduction under Section 80CCD.

Pradhan Mantri Shram Yogi Maan-Dhan (PM-SYM)

PM-SYM is a voluntary pension scheme for unorganized workers with earnings of up to Rs.15,000 monthly. Subscribers contribute a small sum as a monthly premium until retirement and subsequently receive at least a minimum assured pension of Rs.3,000 per month. The scheme provides social security to farm labourers, construction labourers, and small business employees, allowing them to bear their financial costs when they get old.

Public Provident Fund (PPF)

Although not a traditional pension scheme, PPF is a 15-year locked-in long-term investment instrument guaranteeing money in old age. It gives good interest with tax deduction under Section 80C. The maturity corpus can be used to finance the retirement expenditure and is therefore a must long-term planning product. Knowledge and access to government pension plans can ensure a financially secure future so that you can live your old age peacefully and safely.