Atal Pension Yojana: The Atal Pension Yojana (APY) is a key government scheme that encourages workers, especially those in the informal sector, to achieve financial security for their retirement. Under the scheme, members make regular payments and receive a pension after the age of 60. However, under certain circumstances, members can exit the scheme prematurely, which is subject to strict rules.
Withdrawal options before 60 years of age
Withdrawal from the plan before the age of 60 is possible only in the event of serious illness, death, or other specified circumstances. Instead of receiving the full pension, members are paid only their own contributions and the interest earned on them. Government contributions are not refundable in this situation. If a member dies before age 60, their pension amount and contributions are passed on to their spouse or nominee. The spouse or nominee can continue the plan or withdraw from it.
Voluntary Withdrawal Rules
Voluntary withdrawal allows members to exit the plan prematurely, but in this case, they receive a refund of only their contributions and interest, while the government’s contribution is not refunded. This option is available in special circumstances, such as financial constraints or other personal reasons.
Withdrawal process and required documents
To withdraw, a member must apply to their pension fund manager. They must submit the required documents, including APY account details, proof of identity, and a medical certificate (if withdrawing due to illness). After the application is verified, the withdrawal process is completed.
Expert advice
Financial advisors say that withdrawing from this plan early without compelling reasons is not advisable, as it could compromise future financial security. It’s best to understand the plan’s rules before making a decision. The Atal Pension Yojana has strict rules for premature withdrawal that must be followed. This plan is a strong means of providing financial security after retirement. Therefore, it is important to thoroughly understand all the terms and conditions before exiting the plan.