Anew pension scheme named ‘Vatsalya’ has been proposed for minors by Finance Minister Nirmala Sitharaman in the Union Budget 2024-25 which was presented in the Parliament on 23rd July 2024.
Contributory pension scheme can have contributions by parents and guardians. Once the minor attains the age of majority, the plan can be converted into a normal Nation Pension System account.
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‘Vatsalya’ Scheme Announced In Budget 2024
The NPS Vatsalya scheme is good for long term financial planning for children. It is similar to the existing NPS, wherein employees can build a retirement corpus after regular contributions to the fund. NPS contributions are invested in market-linked instruments such as stocks and bonds. So it can provide higher returns in the long term if compared to traditional fixed-income options.
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FM On Committee To Review NPS
The Union Minister also announced that the committee to review the NPS has made considerable progress in its work.
She expressed satisfaction that the Staff Side of the National Council of the Joint Consultative Machinery for Central Government Employees have taken a constructive approach.
“A solution will be evolved which addresses the relevant issues while maintaining fiscal prudence to protect the common citizens,” the Minister said in her Budget speech.
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Last year, the Finance Ministry formed a committee to evaluate the pension scheme for government employees and suggest necessary changes, taking into account the current framework and structure of
Under the old pension scheme, a government employee is entitled to a monthly pension after retirement. Under the new pension scheme, employees contribute a portion of their salaries to the pension fund. The old pension scheme was discontinued in December 2003, and the new pension scheme came into effect on April 1, 2004.
(With Inputs From ANI)
