UPSC Prelims Practice Questions — PFRDA issues NPS Vatsalya Scheme Guidelines 2025 to strengthen long-term financial security for Minors

Q1. NPS Vatsalya is operated under the National Pension System architecture. Within the Union Government, the administrative control over PFRDA and the NPS framework vests in which one of the following?

  • A. Department of Financial Services, Ministry of Finance
  • B. Department of Economic Affairs, Ministry of Finance
  • C. Ministry of Women and Child Development
  • D. Department of Expenditure, Ministry of Finance

Q2. With reference to the legal framework governing the Pension Fund Regulatory and Development Authority (PFRDA), consider the following statements: 1. PFRDA was conferred statutory status by the PFRDA Act, 2013, having earlier functioned as an interim, non-statutory authority. 2. The PFRDA Act came into force on the very date it was passed by Parliament. 3. NPS is regulated under the PFRDA Act, 2013 read with regulations framed thereunder by PFRDA and the Department of Financial Services. Which of the statements given above is/are correct?

  1. PFRDA was conferred statutory status by the PFRDA Act, 2013, having earlier functioned as an interim, non-statutory authority.
  2. The PFRDA Act came into force on the very date it was passed by Parliament.
  3. NPS is regulated under the PFRDA Act, 2013 read with regulations framed thereunder by PFRDA and the Department of Financial Services.
  • A. 1 and 2 only
  • B. 1 and 3 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q3. Under which one of the following statutes does PFRDA derive its authority to regulate the NPS Vatsalya scheme for minors?

  • A. The PFRDA Act, 2013
  • B. The SEBI Act, 1992
  • C. The Insurance Regulatory and Development Authority Act, 1999
  • D. The Banking Regulation Act, 1949

Q4. With reference to the operation of an NPS Vatsalya account, consider the following statements: 1. The minimum annual contribution required to keep the account active is ₹1,000, with no prescribed upper ceiling. 2. The account is opened in the guardian's name, with the minor recorded only as a nominee. 3. The account may be opened through Points of Presence, including major banks and India Post. Which of the statements given above is/are correct?

  1. The minimum annual contribution required to keep the account active is ₹1,000, with no prescribed upper ceiling.
  2. The account is opened in the guardian's name, with the minor recorded only as a nominee.
  3. The account may be opened through Points of Presence, including major banks and India Post.
  • A. 1 and 2 only
  • B. 1 and 3 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q5. NPS Vatsalya was first announced by the Union Finance Minister in which one of the following Union Budgets?

  • A. Union Budget 2024-25
  • B. Union Budget 2023-24
  • C. Union Budget 2022-23
  • D. Union Budget 2025-26

Q6. With reference to the announcement and launch of NPS Vatsalya, consider the following statements: 1. It was announced in the Union Budget 2024-25. 2. It was formally launched on 18 September 2024. 3. It was launched by the Union Finance Minister, Smt. Nirmala Sitharaman. 4. Its principal national launch was held at Mumbai. Which of the statements given above is/are NOT correct?

  1. It was announced in the Union Budget 2024-25.
  2. It was formally launched on 18 September 2024.
  3. It was launched by the Union Finance Minister, Smt. Nirmala Sitharaman.
  4. Its principal national launch was held at Mumbai.
  • A. 1 only
  • B. 4 only
  • C. 2 and 3 only
  • D. 1 and 4 only

Q7. Under the Auto Choice option codified in the NPS Vatsalya Scheme Guidelines 2025, which one of the following Lifecycle Funds carries the highest equity allocation?

  • A. Aggressive Lifecycle Fund (LC-75)
  • B. Moderate Lifecycle Fund (LC-50)
  • C. Conservative Lifecycle Fund (LC-25)
  • D. Active Choice default fund

Q8. With reference to the features codified in the NPS Vatsalya Scheme Guidelines 2025, consider the following statements: 1. The Auto Choice option offers three Lifecycle Funds. 2. Under Active Choice, the guardian allocates funds across four asset classes. 3. On the minor attaining 18, fresh KYC must be completed within three months. 4. On attaining majority, the account transitions to the NPS Tier-II model. Which of the statements given above are correctly identified?

  1. The Auto Choice option offers three Lifecycle Funds.
  2. Under Active Choice, the guardian allocates funds across four asset classes.
  3. On the minor attaining 18, fresh KYC must be completed within three months.
  4. On attaining majority, the account transitions to the NPS Tier-II model.
  • A. 1, 2 and 3 only
  • B. 1 and 4 only
  • C. 2, 3 and 4 only
  • D. 1, 2, 3 and 4

Q9. In the context of NPS exit and withdrawal norms applicable after an NPS Vatsalya account transitions to the All Citizen model, what does a 'partial withdrawal' precisely mean?

  • A. Withdrawal of up to 25% of the contributions made by the subscriber, permitted a maximum of three times during the tenure
  • B. Withdrawal of the entire accumulated corpus, including investment returns, at any time
  • C. Withdrawal of 60% of the corpus as a tax-free lump sum on superannuation
  • D. Withdrawal restricted to the interest income credited in the preceding financial year

Q10. Following PFRDA's liberalisation of partial-withdrawal norms, the minimum period of enrolment before a subscriber first becomes eligible for a partial withdrawal was reduced to which one of the following?

  • A. 3 years from the date of joining
  • B. 5 years from the date of joining
  • C. 7 years from the date of joining
  • D. 1 year from the date of joining

Q11. With reference to savings/pension schemes involving minors, consider the following statements: 1. Sukanya Samriddhi Yojana is meant exclusively for a girl child. 2. NPS Vatsalya is open to all minor citizens up to the age of 18. 3. NPS Vatsalya is regulated by PFRDA. 4. Sukanya Samriddhi Yojana is regulated by PFRDA. Which of the statements given above is/are NOT correct?

  1. Sukanya Samriddhi Yojana is meant exclusively for a girl child.
  2. NPS Vatsalya is open to all minor citizens up to the age of 18.
  3. NPS Vatsalya is regulated by PFRDA.
  4. Sukanya Samriddhi Yojana is regulated by PFRDA.
  • A. 4 only
  • B. 1 and 4 only
  • C. 2 and 3 only
  • D. 3 only

Q12. With reference to the evolution of the National Pension System (NPS) architecture, consider the following statements: 1. NPS was introduced for new entrants to central government service from 1 January 2004. 2. NPS was extended to all citizens on a voluntary basis in 2009. 3. The PFRDA Act was enacted in 2013. 4. NPS Vatsalya, launched in 2024, was the first measure to extend the NPS beyond government employees to ordinary citizens. Which of the statements given above is/are NOT correct?

  1. NPS was introduced for new entrants to central government service from 1 January 2004.
  2. NPS was extended to all citizens on a voluntary basis in 2009.
  3. The PFRDA Act was enacted in 2013.
  4. NPS Vatsalya, launched in 2024, was the first measure to extend the NPS beyond government employees to ordinary citizens.
  • A. 4 only
  • B. 1 and 2 only
  • C. 3 and 4 only
  • D. 2 only