PFRDA: The Pension Fund Regulatory and Development Authority (PFRDA) has launched a new initiative under the National Pension System (NPS). It is called the NPS Health Pension Scheme.
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PFRDA: The Pension Fund Regulatory and Development Authority (PFRDA) has launched a new initiative under the National Pension System (NPS). It is called the NPS Health Pension Scheme. Currently, it has been launched as a proof-of-concept (PoC) under the regulatory sandbox framework. The scheme aims to provide financial support for health expenses in addition to pension.
This scheme is being implemented for a limited period and within a controlled scope. It will provide assistance for outpatient and inpatient treatment expenses. The scheme will operate under the Multiple Scheme Framework (MSF) and participation will be completely optional. Any Indian citizen can contribute.
Pension funds (PFs) will implement this scheme after PFRDA approval. This initiative will be implemented in collaboration with Central Recordkeeping Agencies (CRAs), Health Benefit Administrators (HBAs), or Third Party Administrators (TPAs). Fintech companies may also participate in this pilot project if necessary. For testing, some rules related to exit and withdrawal of NPS have been relaxed.
Subscribers can deposit any amount they wish to in this scheme. This money will be invested as per MSF rules. Individuals over 40 years of age can transfer a maximum of 30% of their NPS common account to this health pension scheme.
Partial withdrawals for medical treatment are also available. Subscribers can withdraw up to 25% of their deposit amount for medical expenses. However, the first withdrawal will be possible only if the account has a corpus of at least ₹50,000.
If the cost of a single treatment exceeds 70% of the total deposit amount, the entire amount will be withdrawn at once. Payment will be made directly to the hospital or HBA/TPA. The remaining amount will be returned to the NPS common account.
PFRDA has also clarified that a robust grievance redressal system will be established. Furthermore, subscriber data will be protected under the Digital Personal Data Protection Act, 2023, and digital consent will be required for data sharing. This pilot project will test the feasibility of integrating pension and health benefits. If successful, it could be implemented on a larger scale in the future.
