NPS Vatsalya Scheme: What is Vatsalya Scheme? How will children get pension, know Nirmala Sitharaman’s plan

Union Finance Minister Nirmala Sitharaman on Wednesday (September 18) officially launched the NPS Vatsalya scheme. The scheme is in line with the announcement made in the Union Budget 2024. The Finance Minister also unveiled an online platform for investing in NPS Vatsalya. She released a brochure of the scheme and distributed Permanent Retirement Account Number (PRAN) cards to minor subscribers.

As part of the launch, NPS Vatsalya programmes will be organised simultaneously at around 75 locations across the country, the ministry said in a statement on Monday. Other locations will join the launch through video conferencing and also distribute PRAN subscriptions to new minor subscribers at that location.

What is NPS Vatsalya Scheme?

NPS Vatsalya is an extension of the existing National Pension Scheme. Managed by the Pension Fund Regulatory and Development Authority (PFRDA), this scheme will focus on children and the investment made in this account will be to ensure long-term wealth.

Under this scheme, parents can start saving for their child’s retirement fund. It works similar to the current NPS, which helps people build a retirement corpus by making consistent contributions throughout their career. Unlike traditional fixed-income options, NPS contributions are invested in market-linked assets like equities and bonds, which can offer higher returns.

The launch of NPS Vatsalya underlines the Government of India’s commitment to promote long-term financial planning and security for all. This scheme is a big step towards giving India’s future generations a stable and independent financial future.

The National Pension Scheme was introduced on January 1, 2004, replacing the OPS — which, like the UPS, capped its pension at 50 per cent of the last basic pay drawn.

How to apply for NPS Vatsalya: How to apply for Vatsalya scheme?

Parents can subscribe to NPS Vatsalya through banks, post offices, pension funds or the e-NPS platform. ICICI Bank launched the scheme at its Mumbai service centre, registering new accounts and issuing symbolic PRAN cards to young customers.

NPS Vatsalya Scheme Rules
Eligibility: To be eligible for NPS Vatsalya, the person must be a citizen of India and the child must be below 18 years of age. Additionally, all parties involved must be KYC (Know Your Customer) compliant.