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Sitharaman will also launch the NPS-Vatsalya scheme at remote locations via video conference. (Photo: PTI)
Union Finance Minister Nirmala Sitharaman will launch the NPS-Vatsalya scheme on September 18 in Delhi, according to sources.
The event will be attended by Deepak Mohanty, Chairman of the Pension Fund Regulatory and Development Authority (PFRDA), Minister of State (MOS) for Finance Pankaj Choudhary, along with senior finance ministry officials and Nagaraju Maddirala, Secretary of the Department of Financial Services.
“NPS-Vatsalya, a plan for contributions by parents and guardians for minors, will be introduced. Upon reaching the age of majority, the plan can be seamlessly converted into a regular NPS account,” FM Sitharaman had said during her budget speech in July.
The NPS-Vatsalya scheme is specifically tailored for younger individuals. Under this innovative program, parents or guardians can open accounts for their minor children and contribute towards their retirement savings.
One of the key features of the scheme is its flexibility. Once the minor turns 18, parents have the option to convert the account into a regular NPS account, ensuring a smooth transition into long-term retirement planning.
“FM Sitharaman will also launch the NPS-Vatsalya scheme at remote locations via video conference,” said the source.
All parents and guardians, whether Indian citizens, NRIs, or OCIs, are eligible to open an NPS-Vatsalya account for their minor children.
A key feature of the scheme is that parents can start saving for their child’s retirement as early as infancy. The power of compounding can significantly enhance returns over a long investment horizon. Additionally, upon reaching adulthood, the child’s account will automatically transition into a regular NPS account. Parents can start with a modest monthly contribution of ₹500 or an annual contribution of ₹6,000.
“The Committee to review the NPS has made considerable progress in its work. I am pleased that the Staff Side of the National Council of the Joint Consultative Machinery for Central Government Employees has taken a constructive approach. A solution will be developed that addresses relevant issues while maintaining fiscal prudence to protect the common citizen,” FM Sitharaman had said during her budget speech.
First Published: Sep 16 2024 | 1:54 PM IST
