ICICI launches Swasthya Pension Scheme blending retirement and healthcare

ICICI Prudential Pension Fund has introduced the Swasthya Pension Scheme under PFRDA's sandbox to support retirement savings while enabling healthcare-linked withdrawals and digital access

ICICI Prudential Pension Funds Management Company on Friday introduced the Swasthya Pension Scheme under the Pension Fund Regulatory and Development Authority's (PFRDA’s) regulatory sandbox framework. The scheme aims to help subscribers build a retirement corpus while offering flexibility to meet medical expenses. 

Speaking during the launch, PFRDA Chairman Sivasubramanian Ramann said the scheme is designed to instil financial discipline by ring-fencing long-term retirement savings for health-related needs and leveraging the benefits of aggregation. The product is intended to complement health insurance rather than substitute it. Going forward, the regulator may consider linking account opening to the subscriber’s existing health insurance coverage to reinforce its supplementary role. 

 

Sumit Mohindra, Chief Executive Officer of the pension fund, said recent reforms in the National Pension System (NPS) framework had enabled such innovation. He pointed to a gap in health financing, noting that insurance penetration in the medical space remains at about 38 per cent, leaving a significant portion of the population dependent on out-of-pocket expenditure. On average, households spend 15–20 per cent of their income on medical costs, with a sizeable share of hospitalisation expenses met through asset sales. 

The Swasthya Pension Scheme is structured primarily as a retirement product with healthcare-linked flexibilities. For the proof-of-concept phase, the fund has launched a variant with higher equity exposure, aligned with the long-term objective of retirement planning. Over time, more conservative options may be introduced based on subscriber risk appetite.

 

Subscribers can make multiple withdrawals of up to 25 per cent of their own contributions, compared to the limit of four partial withdrawals permitted during the tenure of a regular NPS account. In medical emergencies where the requirement exceeds 70 per cent of the corpus, premature closure is allowed, with payments made directly to the healthcare provider and the balance transferred to the standard pension scheme.

 

The scheme is designed as a fully digital offering. For the sandbox phase, the healthcare network is anchored by Apollo Hospitals. Subscribers can access services through the Apollo 24/7 app, pharmacies, hospitals and diagnostic centres, with the option to make payments using their Swasthya Pension account. While the digital app can be used nationwide for medicines and diagnostic services, physical pharmacies and hospitals are currently limited to Bengaluru and Hyderabad during the pilot. KFin Technologies is the digital partner for the initiative.

 

The company emphasised that the scheme is positioned as a complement to health insurance, particularly for co-payments, outpatient consultations, diagnostics, pharmacy expenses and hospitalisation costs. During the sandbox phase, subscribers can enrol through the company’s website or via the Apollo 24x7 platform.