Introduction of ‘NPS Swasthya Pension Scheme’ as a Proof of Concept under the RSF: PFRDA Circular

Introduction of ‘NPS Swasthya Pension Scheme’ as a Proof of Concept under the Regulatory Sandbox Framework: PFRDA Circular

 

PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY

CIRCULAR

PFRDA/2026/07/SUP-CRA/02

Date: January 27, 2026

To

All Stakeholders under NPS

Subject: Introduction of ‘NPS Swasthya Pension Scheme’ as a Proof of Concept under the Regulatory Sandbox Framework

In furtherance of its statutory mandate under the Pension Fund Regulatory and Development Authority Act, 2013 (‘PFRDA Act’) to protect the interests of subscribers and to promote the orderly development of the pension system, the Pension Fund Regulatory and Development Authority (‘PFRDA’ or ‘Authority’) continuously endeavours to encourage innovation within the National Pension System (‘NPS’) framework in a manner that is subscriber-centric, transparent and sustainable. With a view to examine the feasibility of integrating health-related benefit mechanisms with the existing NPS architecture and to assess the associated operational, technological and regulatory aspects, the Authority has decided to permit the introduction of NPS Swasthya Pension Scheme (‘Scheme’) as a Proof of Concept (‘PoC’) on a limited and controlled basis under the Regulatory Sandbox Framework, subject to the terms and conditions specified herein.

2. The NPS Swasthya Pension Scheme shall be introduced as a specific sector scheme under the NPS, intended exclusively to provide financial support for out-patient and in-patient medical expenses, within the framework of the Multiple Scheme Framework (‘MSF’). The Scheme shall be a contributory pension scheme, governed by the provisions of section 12(1)(a) and section 20 of the PFRDA Act and shall be offered to citizens of India on a voluntary basis.

3. The Scheme shall be launched by Pension Funds (‘PFs’), subject to prior approval of the Authority, strictly as a Proof of Concept, for a limited duration and shall operate in a controlled environment under the Regulatory Sandbox Framework. PFs 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 Regulatory Sandbox Framework.

4. The NPS Swasthya Pension Scheme shall operate in accordance with the terms specified in this Circular and Annexure–I. PFs shall ensure readiness of all systems, intermediaries and service providers, including the Central Recordkeeping Agency (‘CRA’) and Health Benefit Administrator (‘HBA’) / Third Party Administrator (TPA), prior to launch PFs shall disclose all material information relating to the Scheme, including but not limited to benefits, fees, claim processes, grievance resolution and exit provisions, in a clear and transparent manner. The PFs in consultation with the HBA may offer additional value-added features to the subscribers.

5. The Scheme shall initially be launched by PF as a Proof of Concept in collaboration with CRA and HBA/TPA, for a limited duration and with a restricted number of subscriber registrations. Upon completion of the PoC period, if the viability / feasibility of Scheme could not be established, the subscribers onboarded during PoC period shall 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 in accordance with extant PFRDA (Exits and Withdrawals under the NPS) Regulations, 2015.

6. This Circular is issued in exercise of the powers conferred upon PFRDA under the provisions of the PFRDA Act, 2013.

Yours sincerely

Digitally Sd/-
Ashish Kumar Bharati
Chief General Manager

Annexure – I

1. Eligibility: Any Citizen of India is eligible for joining the NPS Swasthya Pension Scheme. A Common Scheme Account shall mandatorily be opened along with the NPS Swasthya Pension Scheme Account, if not already available.
2. Fees and charges: Fees and charges applicable under the Scheme shall be governed by the MSF and shall be disclosed transparently. Such charges shall include charges payable to the HBA.
3. Contributions: Subscribers shall be permitted to contribute any amount to the NPS Swasthya Pension Scheme, in accordance with the extant guidelines applicable to the Non-Government Sector under NPS.
4. Investment of contributions: Contributions under the Scheme shall be invested by the PFs in accordance with the investment guidelines prescribed under the MSF.
5. Transfer of Contributions from Common Scheme Account: Subscribers (excluding subscribers under Government Sector and Government-owned Corporates), aged above 40 (forty) years shall be permitted to transfer up to 30% (thirty percent) of their self and/or employee contributions from the Common Scheme Account to the NPS Swasthya Pension Scheme Account.
6. Partial Withdrawals for Medical Expenses: Subscribers shall be permitted to make partial withdrawals from their NPS Swasthya Pension Scheme Account to meet outpatient or inpatient medical expenses as and when such expenses arise. At any instance, withdrawal shall be permitted up to 25% (twenty-five percent) of the subscriber’s own contributions made to the Scheme, in accordance with the provisions of the PFRDA Act, 2013. There shall be no restriction on the number of partial withdrawals and no minimum waiting period shall apply, provided that the first partial withdrawal shall be permitted only after accumulation of a minimum corpus of ₹50,000 under the Scheme.
7. Premature Exit for Critical Medical Treatment: In case of inpatient medical treatment where medical expenses in a single instance exceed 70% (seventy percent) of the total corpus available in the subscriber’s NPS Swasthya Pension Scheme Account, the subscriber shall be permitted to undertake a premature exit with 100% (one hundred percent) lump sum, irrespective of the corpus size, solely for meeting such medical expenses.
8. Settlement of Claims: Amounts withdrawn or exited shall be remitted directly to the concerned HBA/TPA, as applicable, based on valid claims and supporting invoices. Any surplus amount remaining after settlement of medical expenses shall be transferred to the subscriber’s Common Scheme Account.
9. Exit in Other Cases: In all other cases, exit provisions applicable to All Citizens under NPS, including normal and premature exit, shall apply upon transfer of the accumulated amount from the NPS Swasthya Pension Scheme Account to the Common Scheme Account.
10. Grievance Redressal Mechanism: PFs, in association with the HBA/TPA, shall establish a robust grievance redressal mechanism to ensure timely and effective resolution of subscriber grievances. The responsibility for grievance resolution shall vest with the PF. CRAs shall provide necessary subscriber-level information to facilitate efficient servicing and grievance handling.
11. Data Sharing and Consent: Subscriber-level data required for claim processing shall be shared with the HBA/TPA or hospital, as applicable. In compliance with the Digital Personal Data Protection Act 2023 and rules framed thereunder, explicit digital consent shall be obtained from the subscriber by the PF or CRA at the time of activation of the NPS Swasthya Pension Scheme.