Deferred withdrawal from New Pension Scheme allowed

Subscribers have the option to defer withdrawal and stay invested

March 14, 2013 04:57 pm | Updated November 17, 2021 12:28 am IST - New Delhi

The Pension Fund Regulatory and Development Authority (PFRDA) has allowed investors in the New Pension Scheme (NPS) to opt for ‘deferred withdrawal’ of their money at the time of exit, as against the current practice of ‘phased withdrawal’.

The replacement of ‘phased withdrawal’ with ‘deferred withdrawal’ was taken after PFRDA received feedback from various stakeholders, the pension fund regulator said.

Stakeholders informed PFRDA that subscribers be given a specific option to defer or time the entire lump sum withdrawal (maximum 60 per cent) at the time of exit from NPS.

This would be a better option than forcing subscribers to choose a certain percentage each and every year while opting for the ‘phased withdrawal’ option, including the year in which they are exiting the system.

Under the deferred withdrawal facility, subscribers, at the time of exit from NPS, can exercise the option to defer withdrawal of eligible lump sum and stay invested in the NPS, according to PFRDA.

No fresh contributions

However, no fresh contributions will be accepted and also no partial withdrawals will be allowed during such a period of deferment.

The subscriber can withdraw the deferred lump sum amount at any time before attaining the age of 70 years by giving a withdrawal application or notice.

If no such notice is given, the accumulated pension wealth would be automatically monetised and credited to his/ her bank account upon attaining the age of 70 years.

As on March 2, NPS manages a corpus of over Rs.28,400 crore of 44.93 lakh subscribers. Around two lakh subscribers are from the private sector while 27 lakh are from Central/State governments.


Around 15.79 lakh subscribers are served by NPS-Lite, which is designed to ensure ultra-low administrative and transactional costs.

NPS is an initiative of PFRDA, the apex body established by the government to regulate and develop the pension sector.

NPS has been extended to all citizens with effect from May 1, 2009.

0 / 0
Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in


Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.