PFRDA Rolls Out NPS Swasthya Pension Scheme On Pilot Basis - Learn About Eligibility, Withdrawals, Exit

The Pension Fund Regulatory and Development Authority (PFRDA) has introduced the Swasthya Pension Scheme on a pilot basis with a limited number of subscriber registrations, aiming to link it with the health-related benefits of the National Pension System (NPS). The scheme aims to help cover subscribers' inpatient and outpatient expenses.

"PFs (Pension Funds) may also collaborate with FinTechs and other such entities for carrying out such PoC. For the purpose of this PoC, provisions of PFRDA (Exits and Withdrawals under NPS) Regulations, 2015 have been relaxed under the Regulatory Sandbox Framework," PFRDA stated in a circular.

PFRDA also noted that if the scheme fails to be feasible or viable during the pilot period, the subscribers will be provided an option to transfer their accumulated corpus from the NPS Swasthya Pension Scheme Account to the Common Scheme Account and thereafter exercise exit.

Who Are Eligible For NPS Swasthya Pension Scheme?

Any citizen of India is eligible to subscribe to the NPS Swasthya Pension Scheme.

How Does NPS Swasthya Pension Scheme Work?

To join this scheme, a person must open a Common Scheme Account along with the NPS Swasthya Pension Scheme Account. The minimum investment is Rs 1,000, in line with rules for non-government NPS subscribers. However, there is no maximum limit.

The contributions made in the account will be managed by Pension Funds, which will invest funds across multiple asset classes under the NPS Multiple Scheme Framework. If the funds are not used for medical expenses, they will continue to generate returns based on the chosen asset allocation.

Under this scheme, the subscriber is required to pay the medical bill upfront and later seek reimbursement from the account based on the invoices. If the reimbursement amount exceeds the actual medical expenses, then the surplus will be transferred to the subscriber's Common Scheme Account.

Withdrawal From NPS Swasthya Pension Scheme

The scheme allows partial withdrawal to pay inpatient and outpatient medical expenses, only after the accumulation of a minimum corpus of Rs 50,000. Notably, withdrawal is permissible up to 25 per cent of the subscriber's own contributions made to the scheme. However, there is no limit on the number of partial withdrawals, and no minimum waiting period shall apply.

Transfer Of Contributions From Common Scheme Account

Excluding subscribers under the Government Sector and Government-owned Corporates, other subscribers aged above 40 can 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.

Premature Exit From NPS Swasthya Pension Scheme

In case the subscriber's inpatient medical expenses in a single instance exceed 70 per cent of the total corpus available in the account, then the subscriber is permitted to exit the scheme with a full lump sum amount.

If the subscriber wants to exit the scheme, then they can transfer all their amount from the NPS Swasthya Pension Scheme Account to the Common Scheme Account