Mumbai, February 13 Pension Fund Regulatory and Development Authority (PFRDA) Chairman S Ramann said on Friday that three pension funds are working on introducing plans bundled with health coverage for the benefit of investors.
The health coverage may come either through tie-ups with health insurance companies or with healthcare providers, Ramann told reporters here.
Explaining the new pension scheme, "Swasthya idea," under which the offerings are being planned, Ramann said, "Our aim is to try and get people to understand that they need to protect themselves. We want them to save money in a medical pension scheme. And it is dedicated solely for medical expenses."
It may be noted that the PFRDA launched the "Swasthya" platform in January this year with this intent. As per the scheme, up to 30 per cent of an investor's money can be set aside for covering medical expenses during the period of a pension plan.
Ramann said that aggregation of investors is among the biggest advantages that the NPS offers, which allows pension funds to negotiate better deals while making some health coverage available to investors.
This may also include cheaper top-ups from health insurance companies, which will be in addition to the 30 per cent amount that is set aside, he said, adding that hospitals will also be able to offer better deals for treatments due to the high volumes.
Healthcare facilities will also get their money immediately after treating a patient, which is unlike a central government health scheme that takes months to release payments.
Ramann named pension funds sponsored by ICICI, Axis, and Tatas as ones conducting "experiments" on launching such coverage right now, and added that he expects ICICI to come up with a final product for customers soon.
The PFRDA chief also said that efforts are underway to study how double-digit returns can be sustained over longer periods, and added that investments in asset classes like project finance and real estate will also be undertaken.
He expects the maiden pension fund investment into an alternative investment fund to happen before the end of March, and added that this is part of the mandate to invest up to 5 per cent in alternative avenues.
Investments in gold and silver exchange-traded funds will be part of that and will not exceed 1 per cent levels, he said.
At least four banks, or consortium of banks, have evinced interest to get into pension fund business after the PFRDA allowed such a move, he said, adding that this includes Axis Bank and a consortium of Union Bank of India, Indian Bank, and Star Daichi.
Admitting that the NPS coverage is dismal at just 1 crore people, Ramann said that the PFRDA is in talks with the National Payments Corporation of India for help in investor acquisition.
The NPCI-run unified payments interface is used by over 800 million people who have done KYC with a bank, and having acquisition possibilities through the third party application providers, he said, stressing that this can help ensure digital onboarding.