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International Financial Services Centres Authority (IFSCA) | Ministry of Finance
Approved during the 27th meeting of the Authority on February 9, 2026, the draft IFSCA (Pension Fund) Regulations, 2026 enable Pension Fund Managers (PFMs) to offer voluntary pension schemes to any individual above the age of 18 years. The framework provides access to global retirement solutions through the IFSC, with the aim of positioning the IFSC as a global hub for long-term retirement savings and financial services.
The framework features a flexible structure with “Active Choice” and “Auto Choice” investment options, and introduces a unique Healthcare Benefit Option, allowing subscribers to allocate up to 10% of contributions to a dedicated healthcare sub-account. To ensure security and transparency, the regulations prescribe mandatory registration for Pension Fund Managers (PFMs), minimum net worth requirements, and global investment flexibility with robust prudential safeguards.
Key Pillars of the IFSCA Pension Fund Framework
Universal Voluntary Access: Enabling any individual globally, aged 18 and above, to participate in high-quality retirement schemes through the IFSC.
Flexible Investment Choices: Providing subscribers with Active Choice for personal asset allocation and Auto Choice (Life-Cycle Fund) for age-based automatic adjustments.
Dedicated Healthcare Sub-Account: Allowing for up to 10% contribution allocation to be utilized for medical emergencies or purchasing health insurance at retirement.
Global Investment Reach: Permitting PFMs to invest across domestic and foreign equities, fixed income, and alternative assets within defined risk limits.
Three-Lines-of-Defence Governance: Implementing a risk management framework backed by board oversight, independent directors, and mandatory net worth requirements for PFMs.
What is the “Healthcare Benefit Option”? The Healthcare Benefit Option is a specialized feature of the 2026 Regulations that allows subscribers to direct a portion of their pension contributions (up to 10%) into a separate sub-account. This sub-account is invested in low-risk, liquid instruments, ensuring funds are accessible for medical emergencies or planned healthcare expenses. At the time of retirement, subscribers have the flexibility to use the accumulated balance to purchase health insurance, roll it over into their main pension corpus, or systematic withdrawal for health-related costs, effectively integrating health security with long-term financial planning.
Policy Relevance
The 2026 IFSCA Regulations represent a transition from localized pension products to “Global Financial Hub” status, positioning GIFT City as a direct competitor to international financial centers like Singapore and Dubai.
Strategic Impact:
Attracting Global Capital: By allowing PFMs to offer schemes to “any individual,” the IFSC can attract long-term savings from the global Indian diaspora and international investors, deepening India’s capital markets.
Innovating Retirement Solutions: The Healthcare Benefit Option addresses a critical gap in traditional pension models, providing a template for domestic pension reforms to integrate health and retirement security.
Deepening Professional Fund Management: Mandatory registration and high governance standards will foster a more sophisticated ecosystem of Pension Fund Managers in India, enhancing the nation’s institutional investment capacity.
GIFT City as a Global Gateway: The systematic withdrawal plans and deferral options up to 75 years of age make the IFSC an attractive destination for high-net-worth individuals seeking flexible, globalized retirement vehicles.
Relevant Question for Policy Stakeholders: How can the ‘Healthcare Benefit Option’ be utilized as a marketing lever by the Ministry of Finance to position GIFT City as a more ‘holistic’ retirement hub compared to existing global centers?
Follow the full news here: IFSCA: Draft Pension Fund Regulations 2026 Approved