NPS Swasthya Pension Scheme launched: The Pension Fund Regulatory and Development Authority (PFRDA) has launched NPS Swasthya Pension Scheme (NSPS), an initiative
to offer financial assistance for medical expenses. It will be a contributory pension scheme and will be offered to Indian citizens on a voluntary basis. What is NSPS? NPS Swasthya Pension Scheme, or NSPS, is a scheme designed to provide financial support for out-patient and in-patient medical expenses, within the framework of the multiple scheme framework (MSF). The PFRDA in a circular issued on January 27 said, “The scheme shall be launched by Pension Funds, subject to prior approval of the authority, strictly as a Proof of Concept (PoC), 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, it added. Let us take a look at the NPS Swasthya Pension Scheme’s eligibility criteria and conditions for contributions, partial withdrawal for medical expenses and others: Eligibility Any Indian citizen is eligible to join the NPS Swasthya Pension Scheme. A Common Scheme Account must be opened along with the NPS Swasthya Pension Account, if not opened already. Charges Charges applicable under this scheme shall be governed by the MSF and disclosed transparently. Such charges shall include those payable to the HBA, per the circular. Contributions Under the NPS Swasthya Scheme, subscribers are allowed to contribute any amount, following the current guidelines applicable to the Non-Government Sector under the NPS. Premature Exit For Critical Medical Treatment In the cases of inpatient medical treatment where expenses in a single instance exceed 70 per cent of the total corpus available in the subscriber’s NPS Swasthya Pension Scheme account, the subscriber shall be allowed to make a premature exit with a 100 per cent lump sum, regardless of the corpus size, solely for covering such medical expenses. Partial Withdrawals For Medical Expenses Subscribers are allowed to make partial withdrawals from the NPS Swasthya Pension Scheme Account to cover outpatient and inpatient medical costs as they arise. At any time, withdrawals can be made up to 25 per cent of the subscriber’s own contributions to the scheme, in line with the provisions of the PFRDA Act, 2013. There are no limits on the number of partial withdrawals, and no minimum waiting time period is required, provided that the first partial withdrawal is only permitted after accumulating a minimum corpus of Rs 50,000 in the scheme. Settlement Of claims The withdrawn or exited amounts shall be remitted directly to the concerned HBA/TPA, as applicable, based on valid claims and supporting invoices. The remaining surplus, if any, shall be transferred to the subscriber’s Common Scheme Account after settling medical expenses. Transfer Of Contributions From The Common Scheme Account Subscribers (excluding those under the Government Sector and Government-owned Corporations), aged above 40 years, shall be allowed to transfer up to 30 per cent of their own and/or employee contributions from the Common Scheme Account to the NPS Swasthya Pension Scheme Account. Contributions under the scheme shall be invested by the PFs following the investment guidelines specified in the MSF.
