Source: Business Standard
Why in News?
The Pension Fund Regulatory and Development Authority (PFRDA) has allowed the launch of the NPS Swasthya Pension Scheme as a Proof of Concept (PoC) under its Regulatory Sandbox Framework, marking a first attempt to integrate health-related benefits with India’s pension system.
What is the NPS Swasthya Pension Scheme?
- A sector-specific, voluntary, contributory pension scheme under the National Pension System (NPS)
- Designed to provide financial support for outpatient and inpatient medical expenses
- Operates under the Multiple Scheme Framework (MSF)
- Governed by the PFRDA Act, 2013
Key Objectives
- Test the operational, technological, and regulatory feasibility of linking pensions with healthcare spending
- Address rising out-of-pocket medical expenses
- Explore pension-based solutions to ageing and health-related vulnerabilities
Key Features of the Pilot Scheme
1. Regulatory Sandbox & PoC
- Implemented on a limited and controlled basis
- Pension Funds (PFs) must obtain prior PFRDA approval
- PFs may collaborate with:
- FinTech firms
- Health Benefit Administrators (HBAs)
- Third-Party Administrators (TPAs)
2. Partial Withdrawals for Medical Needs
- Allowed for medical expenses
- Withdrawal cap:
- Up to 25% of subscriber’s own contributions at any instance
- No limit on number of withdrawals
- Minimum corpus requirement: ₹50,000 before first withdrawal
3. Premature Exit for Critical Treatment
- In case of inpatient medical expenses exceeding 70% of total corpus in a single instance
- Subscriber permitted:
- 100% lump-sum premature exit
4. Transfer from Existing NPS Accounts
- Subscribers above 40 years (excluding government employees) may:
- Transfer up to 30% of their contributions
- From existing NPS Tier-I account to Swasthya account
5. Exit Safeguards
- If PoC is found unviable:
- Subscribers can transfer accumulated corpus back to the regular NPS account
- Exit as per existing NPS rules
