NPS Swasthya Pension Scheme (NSPS)

NPS Swasthya Pension Scheme (NSPS) Latest News

The Pension Fund Regulatory and Development Authority (PFRDA) recently rolled out the NPS Swasthya Pension Scheme (NSPS) on a pilot basis.

About NPS Swasthya Pension Scheme (NSPS)

• It is a new initiative launched by the Pension Fund Regulatory and Development Authority (PFRDA) as a Proof of Concept (PoC) under its Regulatory Sandbox Framework. 
• The initiative aims to integrate health-related financial benefits with the existing National Pension System (NPS) framework.
• The scheme, launched for a limited and controlled period, is designed to provide financial support for out-patient and in-patient medical expenses. 
• The scheme will function as a sector-specific contributory pension scheme within the Multiple Scheme Framework (MSF) of NPS and will be offered to Indian citizens on a voluntary basis.
• It will be launched by Pension Funds after obtaining prior approval from PFRDA. 
• As it is being implemented as a pilot project, only a restricted number of subscribers will be enrolled during the PoC phase.
• To facilitate the pilot, certain provisions of the PFRDA (Exits and Withdrawals under NPS) Regulations, 2015, have been relaxed. 
• Pension Funds may also collaborate with FinTech firms and health service administrators to implement the scheme.

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NPS Swasthya Pension Scheme (NSPS) Features

• Any Indian citizen is eligible to join the scheme, but a Common Scheme Account under NPS is mandatory.
• Subscribers can contribute any amount, in line with existing NPS guidelines applicable to the non-government sector.
• Subscribers aged above 40 years (excluding government sector subscribers) may transfer up to 30% of their contributions from the Common Scheme Account to the Swasthya Pension Scheme.
• Partial withdrawals are permitted for medical expenses up to 25% of the subscriber’s own contributions, with no limit on the number of withdrawals, subject to a minimum accumulated corpus of ₹50,000.
• In cases of critical inpatient treatment, where medical expenses exceed 70% of the available corpus, subscribers may opt for 100% premature withdrawal solely to meet such medical costs.
• Claim Settlement and Safeguards:
  • Amounts withdrawn under the scheme will be paid directly to the Health Benefit Administrator (HBA), Third Party Administrator (TPA), or hospital, based on valid claims and supporting bills. 
  • Any surplus remaining after settlement of medical expenses will be transferred back to the subscriber’s Common Scheme Account.

Source: BS