Comparison: Deferment vs Continuation
|
Feature |
Deferment |
Continuation |
|
Purpose |
To delay your withdrawal decision. |
To continue investing and growing your corpus. |
|
Contributions |
Not allowed during the deferment period. |
Allowed and required to keep the account active. |
|
Maximum Age |
Up to 85 years. |
Up to 85 years. |
If you want to stay invested in NPS after reaching 60 years of age or superannuation, you can do so. NPS gives an option of deferring your exit or withdrawal from each of your individual pension accounts separately till the maximum age of 85 years.
Deferment
To remain invested in NPS even after reaching superannuation, you can choose to defer your exit. If you opt for deferment, you will not be able to contribute to your individual pension account during the deferment period, and your request must be initiated as per the applicable PFRDA (Exits and Withdrawals under NPS) Regulations.
Deferment Options Available
• Defer withdrawal of lump sum amount until 85 years of age. You may decide to defer only the lump sum withdrawal and choose to purchase the mandatory annuity. You can also withdraw the deferred lump sum amount systematically in tranches.
• Defer purchase of an annuity until 85 years of age, from the date you turn 60 years or reach superannuation age.
• Defer withdrawal of lump sum amount and the purchase of an annuity.
During the period of deferment, the maintenance charges and fee payable under the NPS in respect of the individual pension account, shall be borne by the subscriber.
Death during Deferment Period
Government Sector subscriber:
a. In case where a subscriber, having deferred the purchase of annuity, dies before such annuity purchase, the default annuity shall mandatorily be purchased by family member(s);
b. In case where a subscriber, having deferred the withdrawal of lump sum amount dies before such lump sum withdrawal, the said amount shall be paid to the nominee(s) or the legal heir(s), as the case may be.
Non-Government sector subscriber:
In case where a subscriber having deferred the purchase of annuity or withdrawal of the lump sum amount, dies before such annuity purchase or lump sum withdrawal, the APW of the subscriber meant for the purchase of annuity or withdrawal of the lump sum shall be paid to the nominee(s) or legal heir(s) as the case may be.
Continuation under NPS (Beyond 60 years of age or the age of superannuation)
Non-Government Subscribers (All Citizens/ Corporate)
Subscriber who desires to continue in the National Pension System and contribute to his retirement account beyond the age of 60 years or the age of superannuation shall have the option to do so by submitting request to his/her associated POP/POP-Corporate in accordance with the applicable PFRDA regulations.
Automatic Continuation: Where a subscriber in the non-government sector does not exit from the National Pension System beyond the age of 60 years, or the age of superannuation then such subscriber shall continue to remain subscribed to the National Pension System till he or she attains the age of 85 years.
For subscribers with an employer-employee relationship, the individual pension account shall be shifted from the employer to All Citizens model.
Government Subscribers
A government subscriber who desires to continue in the National Pension System and contribute to his retirement account beyond the age of 60 years or the age of superannuation shall have the option to do so by submitting his/her request to its associated nodal office in accordance with the applicable PFRDA regulations.
In respect of a subscriber who has superannuated or retired from the government sector and continues under NPS in any manner, including under all citizen model or corporate sector, his exit shall be governed by regulation 3 of PFRDA (Exits and Withdrawals under NPS) Regulations, 2015 and amendments thereto.
Once you have exercised the option to continue with NPS, the other options of deferment will not be available to you.
During the continuation period, you are allowed to continue to contribute to your individual pension account and enjoy the tax benefits as per the applicable tax regimes.
You can also continue to avail all the options and facilities of a normal Individual Pension Account, like access to the CRA system, switching asset classes and fund managers, etc. With the promise of flexibility built into NPS, the scheme allows you to opt for exit from NPS as per applicable provisions and start a pension.
Lodge a Grievance
View Exits & Withdrawals Regulations