NPS Swasthya Pension Scheme Gets Green Light After Sandbox Testing, PFRDA Plans Public Launch In 60–70 Days

The Pension Fund Regulatory and Development Authority (PFRDA) has announced plans to roll out the NPS Swasthya Pension Scheme within the next 60 to 70 days. While speaking at a recent event, PFRDA Chairman S. Ramann confirmed that the bundled product offering both Health insurance and a retirement pension through a single product has received board approval and is currently undergoing backend integration.

The journey toward this rollout began in January 2026, when PFRDA launched the first Proof of Concept (POC) of NPS Swasthya under the regulatory sandbox. It means it launched the scheme as a restricted pilot project to evaluate the scheme's viability. At that time, PFRDA said, “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.”

On April 7, the regulator launched a second POC, incorporating new operational features and product flexibility based on early feedback. While launching the second POC, PFRDA highlighted the rising healthcare cost and said, "The initiative addresses a growing gap in India’s retirement landscape, where healthcare costs are projected to rise by 11.5 per cent to 14 per cent in 2026, significantly outpacing inflation and putting long-term financial security under pressure for millions."

There is no doubt that healthcare inflation is much higher than the consumer price index (CPI) inflation,  and this, many a time, prevents the needy, especially the seniors who typically experience one of the other chronic diseases with ageing, from seeking medical treatment.

But with the successful completion of the sandbox testing, the NPS Swasthya Pension Scheme is ready to provide healthcare and pension security to subscribers. The onboarded subscribers need not mandatorily exit the scheme (the option was included in the POC), as the scheme is set to launch outside the sandbox within three months (60-70 days) for all NPS subscribers.  

Let us understand what this scheme is to offer, as per the available information.

What Is NPS Swasthya Pension Scheme?

It is a bundled product that offers health insurance with pension funds and is open to all categories of NPS subscribers. This integration is designed to address rising healthcare costs while accumulating a corpus for a retirement pension.

Charges: The fees and charges under the scheme will be in accordance with the Multiple Scheme Framework (MSF) under the NPS framework and will be disclosed separately by the offerers. These will include the charges payable to the Health Benefit Administrator (HBA) and central recordkeeping agencies (CRAs).

Contribution: It requires a minimum subscription amount of Rs 25,000. Further, non-government sector subscribers, aged more than 40 years, can transfer up to 30 per cent of the fund (their self or employee contribution) from the Common Scheme account to the NPS Swasthya Pension Scheme Account.

Withdrawal: The scheme offers a withdrawal facility for medical needs for up to 25 per cent of their contribution, without any restriction on the number of partial withdrawals. These withdrawals can be made for expenses related to OPD, diagnostics, hospitalisation, or pharmacy purchases. There is no waiting period for withdrawals. The scheme permits withdrawal anytime, provided that the minimum accumulation of Rs 50,000 is maintained in the NPS account.

The subscribers would also have the option to exit the scheme, withdrawing a 100 per cent lump sum in case the expense for an inpatient treatment in a single instance is more than 70 per cent of the total corpus.