About NPS Vatsalya
Definitions
a. The “Account” shall mean an individual pension account of a minor opened through a guardian under the “NPS Vatsalya” scheme. It shall suitably draw from the features of National Pension System (NPS) Tier- 1 Account.
b. The “Subscriber” for the purpose of this scheme shall mean a minor who has opened the account under the scheme.
c. The “Guardian” shall mean either the parent of a minor or a legal guardian.
d. The “Minor” shall mean a person who has not reached the age of eighteen years.
Eligibility for Joining
a. Any minor who is a Citizen of India is eligible for opening account under the scheme, until attaining the age of eighteen years.
b. Any other requirements as may be laid down by the PFRDA from time to time.
Operational Framework of the Scheme
a. The account shall be opened under the scheme by the natural/legal guardian in the name of the minor, who shall be the sole beneficiary.
b. The account shall be operated by the guardian for the exclusive benefit of the minor until the attainment of the age of majority (18 years).
c. Know Your Customer (KYC) norms to be applicable to the guardian shall be in accordance with the KYC norms stipulated by the PFRDA from time to time. In case of a court appointed legal guardian, a copy of the court order in respect of the appointment of the Legal Guardian shall be submitted along with the KYC documents.
d. Date of Birth proof (ie Birth certificate of the minor, School leaving certificate / Mark sheet issued by Higher Secondary Board of respective states, ICSE, CBSE, etc and Passport of the minor, etc), and bank account details of the minor or joint account with the minor are required for opening the account. The Bank account details of a minor or a joint account with a minor are not mandatory for the opening of an account of an Indian Resident, but it shall be mandatory at the time of partial withdrawal or exit on the attainment of the age of 18 years.
e. A unique Pension Retirement Account Number (PRAN) in the name of the minor subscriber shall be issued by the concerned CRA.
f. Upon attainment of 18 years of age, the account of the subscriber shall continue to be operational and will be seamlessly shifted into NPS-Tier 1 Account- All Citizen Model.
g. Upon attainment of 18 years of age, a fresh KYC of the subscriber be carried out within 3 months from the attainment of majority as specified by PFRDA from time to time. The contribution shall be allowed into the NPS Tier-1 Account, post submission of fresh KYC.
h. On shifting into NPS-Tier I account upon attaining majority, the features, benefits, including exit norms under the NPS-Tier-I -All Citizen Model shall be applicable.
Contributions to the Account
Contributions under the scheme can be made by the guardian or the subscriber through various modes of contribution as specified by PFRDA from time to time. The minimum contribution is Rs 1000 per annum, and there shall be no limit on maximum contribution. The initial contribution for enrolment under the scheme is Rs 1000.
Charges & Fees
The charges and fees to be levied on the account at any time shall be the same as the charges under NPS - All Citizen Model as stipulated by PFRDA from time to time.
Investment of the Contributions into the Account
The Investment of the contribution made into the account, which includes the selection of the pension fund, shall be the same as the choices available under the NPS - All Citizen Model as stipulated by PFRDA from time to time.
Distribution Channel under the Scheme
a. The banks, India Post, stock broking houses and any other entity registered as a Point of Presence (POP) under PFRDA (Point of Presence) Regulations, 2018 are eligible to enroll the subscribers under the scheme, either directly or through the means of Retirement Advisers or Pension agents, i.e. Business Correspondents, Insurance Agents, mutual fund distributors engaged by them.
b. The enrolment under the scheme shall also be extended through an online platform (eNPS).
c. Any other channel allowed by the PFRDA from time to time.
Exit & Withdrawal from the Account
a. For the purpose of education of subscriber, treatment of specified illnesses, disability more than 75%, or the reasons as may be specified by PFRDA in the interest of the minor subscriber under the regulations, the guardian shall be allowed to partially withdraw upto 25% of subscribers’ contribution excluding returns thereon after minimum 3 years from the date of opening of account, for maximum three times till the subscriber attains 18 years of age. Such a facility shall be made available on a declaration basis.
b. In the case of the death of the minor subscriber, the entire accumulated pension wealth is to be paid to the guardian.
c. In case of the death of the guardian registered under the account, another guardian is to be registered on behalf of the minor subscriber by submitting the KYC documents as specified by the PFRDA from time to time.
d. In case of the death of both parents, the legally appointed guardian may continue the account with or without making contributions to the account, and upon attainment of 18 years of age by the subscriber, the subscriber shall have an option to continue or exit from the scheme.
e. The subscriber shall be allowed to exit only upon attainment of age of 18 years. On such exit, at least eighty per cent of the accumulated pension wealth available in the account shall be utilised for the purchase of annuity, and the remaining balance shall be paid in a lump sum. In case the accumulated pension wealth available in the account is equal to or less than two lakh fifty thousand, or purchase of annuity is not available from empanelled Annuity Service Providers (‘ASPs’), the subscriber shall have the option to withdraw the entire accumulated pension wealth.
f. The exits and withdrawals under the scheme shall be governed by the provisions of the Pension Fund Regulatory and Development Authority (Exits and Withdrawals under the National Pensions System) Regulations, 2015 and amendments thereof.