In a first-of-its-kind initiative in India’s pension sector, ICICI Prudential Pension Funds Management Company has introduced the Swasthya Pension Scheme, a hybrid retirement solution designed to combine long-term wealth creation with medical expense flexibility.
The scheme has been launched under the regulatory sandbox framework of the Pension Fund Regulatory and Development Authority (PFRDA), marking a significant innovation in the National Pension System (NPS) ecosystem.
Unlike traditional pension products, this new offering integrates retirement planning with controlled liquidity for healthcare needs. The core objective is to encourage disciplined long-term savings while allowing subscribers limited access to funds during medical requirements.
Speaking at the launch, PFRDA Chairman Sivasubramanian Ramann emphasized that the scheme aims to prevent premature depletion of retirement savings while still providing flexibility for health-related expenses. He noted that in the future, regulators may even consider verifying whether subscribers already have health insurance before opening a Swasthya account, reinforcing its role as a supplementary tool rather than a replacement.
According to Sumit Mohindra, CEO of ICICI Prudential Pension Funds, the product was conceptualized to bridge a significant gap in healthcare financing in India.
Key challenges highlighted include:
Only about 38% health insurance penetration in India
Nearly 40% of healthcare expenses paid out-of-pocket
Average households spending 15–20% of income on medical costs
Around 25% of hospitalization expenses financed through asset sales
The Swasthya Pension Scheme seeks to reduce financial stress during medical emergencies while maintaining the primary goal of long-term retirement corpus growth.
During the sandbox proof-of-concept phase, the scheme offers a high equity allocation strategy, focusing on long-term wealth accumulation. Over time, more conservative investment options may be introduced depending on subscriber risk appetite.
One of the most significant features of the Swasthya Pension Scheme is enhanced liquidity:
Subscribers can make multiple withdrawals up to 25% of their own contributions
Unlike regular NPS accounts (which allow only four partial withdrawals during tenure), this scheme permits quicker and more flexible access
In case of severe medical emergencies where expenses exceed 70% of the total corpus, premature closure is allowed
Funds in such emergency cases are paid directly to healthcare providers, with any remaining balance shifted to a common scheme
This structure ensures medical support without compromising long-term retirement goals.
The scheme operates on a fully digital platform. For the pilot phase, the healthcare network is anchored by Apollo Hospitals.
Subscribers can access services via:
Apollo 24/7 app
Apollo pharmacies
Apollo hospitals and diagnostics centers
Currently, physical hospital and pharmacy access under the pilot is available in Bengaluru and Hyderabad, while app-based services such as medicines and diagnostics are accessible nationwide.
Technology integration for the platform is managed by KFin Technologies.
ICICI Prudential has clarified that the Swasthya Pension Scheme is not a substitute for health insurance. Instead, it is positioned to:
Cover co-pay requirements
Support outpatient (OPD) expenses
Fund pharmacy and diagnostic costs
Assist in hospitalization-related gaps
During the sandbox phase, subscribers can register:
Through the official ICICI Prudential Pension Funds website
Via the Apollo 24/7 app
With rising medical costs and inadequate insurance penetration in India, the Swasthya Pension Scheme introduces a structured way to balance retirement planning with healthcare preparedness. If successful in the sandbox phase, it could pave the way for a new category of integrated pension-health products within the NPS framework.