PFRDA Notifies NPS Vatsalya Scheme Guidelines 2025 for Long-Term Financial Security of Minors

The scheme aligns with the national vision of Viksit Bharat@2047, contributing to the broader objective of building a pensioned and financially secure society.

The Pension Fund Regulatory and Development Authority (PFRDA) has issued the NPS Vatsalya Scheme Guidelines 2025, providing a comprehensive framework for the implementation of the National Pension System Vatsalya (NPS Vatsalya)—a contributory savings and long-term financial security scheme designed exclusively for minors.

Background and Launch

NPS Vatsalya was announced in the Union Budget for FY 2024–25 and formally launched on 18 September 2024 by the Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman. The scheme enables parents and legal guardians to begin structured, long-term savings for children from an early age, with a seamless transition to the National Pension System (NPS) upon attaining majority.

Aligned with the amendments to the PFRDA (Exits and Withdrawals under NPS) Regulations, 2015, the Guidelines introduce flexible provisions that ensure continuity of savings while safeguarding the financial interests of minors.

Key Features of NPS Vatsalya

Eligibility

• Open to all Indian citizens, including NRI/OCI, below 18 years of age

• The minor is the sole beneficiary

• Account is opened in the name of the minor and operated by the guardian

Contributions

• Minimum initial and annual contribution: ₹250

• No maximum contribution limit

• Contributions may also be gifted by relatives and friends

Pension Fund Selection

• The guardian may select any one Pension Fund registered with PFRDA

Partial Withdrawal Provisions

• Permitted after three years from account opening

• Up to 25% of own contributions (excluding returns)

• Allowed for education, medical treatment, and specified disabilities

• Withdrawal frequency:

  • Up to two times before 18 years

  • Up to two times between 18 and 21 years, subject to conditions

Options on Attaining Majority

• Fresh KYC mandatory at age 18

• Options available up to age 21:

  • Continue under NPS Vatsalya, or

  • Shift to NPS Tier I (All Citizen Model or other applicable models), or

  • Exit, with:

    • Up to 80% as lump sum

    • Minimum 20% annuitisation

    • Full withdrawal permitted if total corpus is ₹8 lakh or less

Incentivisation for Community-Level Outreach

The Guidelines introduce a targeted incentivisation framework for community-level workers such as Anganwadi workers, ASHAs, and Bank Sakhis, recognising their pivotal role in awareness creation and onboarding—particularly in rural and semi-urban areas.

Building a Savings Culture for the Future

NPS Vatsalya aims to:

• Foster a culture of early savings

• Promote financial literacy from childhood

• Strengthen long-term financial planning for families

The scheme aligns with the national vision of Viksit Bharat@2047, contributing to the broader objective of building a pensioned and financially secure society. The Guidelines provide clarity, transparency, and uniformity for all stakeholders involved in the scheme’s implementation.

For detailed provisions and operational guidance, stakeholders may refer to the NPS Vatsalya Scheme Guidelines 2025 issued by PFRDA.