PFRDA Rolls Out NPS Swasthya Pension Scheme

Mumbai: The pension fund regulator--the Pension Fund Regulatory and Development Authority (PFRDA) has launched NPS Swasthya Pension Scheme that will provide financial support for out-patient and in-patient medical expenses of the subscribers. The scheme at present is being rolled out on a pilot basis under the Regulatory Sandbox Framework to examine the feasibility of integrating health-related benefit mechanisms with the existing National Pension Scheme (NPS) architecture and to assess the associated operational, technological and regulatory aspects, the PFRDA said in a circular.

Under the scheme, all Indian citizens can make voluntary contributions and use the corpus to meet both outpatient (OPD) and inpatient(hospitalization) expenses. The minimum investment is ₹1,000, in line with rules for non-government NPS subscribers, and there is no maximum limit.

Pension Funds (PFs), with prior approval from PFRDA, will administer the scheme in collaboration with Central Recordkeeping Agencies (CRA) and Health Benefit Administrators (HBA) or Third-Party Administrators (TPA). FinTech companies may also participate in the PoC.

Subscribers (excluding government subscribers ), aged above 40 years shall be permitted to transfer up to 30 per cent of their self and/or employee contributions from the Common Scheme Account to the NPS Swasthya Pension Scheme Account.

Provisions of the PFRDA (Exits and Withdrawals under NPS) Regulations, 2015, have been relaxed to facilitate testing under the sandbox framework.

There shall be no restriction on the number of partial withdrawals for medical expenses and no minimum waiting period shall apply for withdrawals. However, partial withdrawals for medical expenses will be permitted up to 25 per cent of the subscriber’s own contributions, with the first withdrawal allowed after a minimum corpus of ₹50,000.

In cases where a single medical expense exceeds 70 per cent of the subscriber’s corpus, premature exit with 100 per cent lump-sum withdrawal will be allowed. Withdrawn amounts will be settled directly with the HBA/TPA or hospital, and any remaining balance will revert to the Common Scheme Account.