Pension Fund Regulatory and Development Authority (PFRDA) launched **NPS Health Pension Scheme** as **Proof of Concept (PoC)** under its Regulatory Sandbox Framework on January 27, 2026. This innovative pilot project tests the integration of healthcare financial assistance with the National Pension System (NPS), allowing subscribers to take care of out-patient and in-patient medical expenses while maintaining retirement savings.
Main characteristics
The scheme operates as a sector-specific, contributory pension product under the **Multiple Scheme Framework (MSF)**, governed by Section 12(1)(a) and 20 of the PFRDA Act, 2013. It is voluntary and open to all Indian citizens. Subscribers must have (or open) a common NPS scheme account along with a health account. Contributions are flexible and invested according to MSF guidelines. Subscribers above 40 years of age (except Government sector) can transfer up to **30%** of their/employee contribution from their common account to the health scheme.
Withdrawal and exit rules
– **Partial Withdrawal**: Up to **25%** of the subscriber’s own contribution for medical needs (out-patient/in-patient), as per PFRDA norms.
– **Premature Exit**: If a single medical expense exceeds **70%** of the corpus, **100% lump sum withdrawal** is allowed. Funds are paid directly to the Health Benefits Administrator (HBA), Third Party Administrator (TPA), or hospital; Any excess amount is returned to the Common Scheme Account.
– **First Withdrawal Limit**: Minimum corpus of Rs 50,000 is required.
Grievance Redressal and Data Security
Pension funds will have to set up efficient grievance redressal mechanism in coordination with HBA/TPA. Sharing subscriber data for claims strictly adheres to the **Digital Personal Data Protection Act, 2023**, which requires explicit digital consent at the time of activation.
Fees and Transparency
Charges follow MSF rules, with full disclosure of costs (including HBA/TPA charges) to ensure subscriber transparency. **Form and future of Pilot**
As a limited, controlled PoC, the scheme evaluates operational, technical and regulatory feasibility. If it is successful, it could be expanded; If not, the participant can transfer the corpus back to the common account and exit as per the existing NPS rules. This initiative is a step towards holistic retirement planning, combining pension security with healthcare support.
-
NCP: Reunification Likely After Polls as Talks Resume Between Rival Factions
-
Bihar: Elderly Dalit Woman Cremated on Road After Access Blocked in Village
-
Shashi Tharoor: Says National Interest, Not Party Lines, Guides His Foreign Policy Views
-
Supreme Court : Clears Meghalaya Murder Accused Over Uncorroborated Confessions
-
Sadhvi Prem Baisa : Laid to Rest as Questions Surround Her Sudden Death
