NPS VATSALYA SCHEME (Syllabus: GS Paper 2 – Gov. Policies)

Context: The finance minister recently made the announcement of a new pension scheme under the National Pension Scheme (NPS), called NPS Vatsalya.

NPS Vatsalya Scheme

• About: It is a scheme under the National Pension Scheme (NPS).
• Purpose: It is designed to help parents and guardians plan for their children's future financial needs.
• Account Opening: Parents or guardians can open an account for their minor children and make contributions towards their retirement savings.
• Accumulation Period: The funds will accumulate until the child turns 18.
• Transfer to Standard NPS: Once the child reaches adulthood, the accumulated amount will be transferred to the standard NPS account.
• Conversion Option: This plan can be seamlessly converted into a non-NPS plan when the child becomes an adult.

National Pension Scheme (NPS)

• About: It is a voluntary retirement benefit scheme introduced by the Government of India to facilitate regular income post-retirement for all subscribers.
• Eligibility: A citizen of India, either a resident, non-resident, or an Overseas Citizen of India, can open an NPS account.
• Contribution and Growth: It helps individuals build a retirement corpus by making regular contributions throughout their careers.
• Regulatory Body: PFRDA (Pension Fund Regulatory and Development Authority) is the governing body for NPS.