Pension regulator PFRDA has enabled government sector NPS subscribers to continue with their existing ‘default’ investment pattern and pension fund manager (PFM) even after their retirement. 

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Hitherto, government subscribers could not contribute to their NPS account post their superannuation until they choose to continue their account. Government NPS subscribers can now continue to contribute to their NPS account seamlessly after their superannuation without the need of submitting any request in this regard. They will also be free — post their retirement — to choose any other investment pattern and PFM, rather than continuing the same investment pattern.

Of the total NPS and APY subscriber base of 3.7 crore, the number of government sector subscribers stood at 81 lakhs as of end August 2022. The number of corporate NPS subscribers stood at about 16 lakh.

For such subscribers who opt for existing ‘default’ investment pattern post retirement, both their prospective and legacy contributions would continue to be governed by this investment pattern, the PFRDA has said.

Relief for retirees

This latest PFRDA move would come as huge relief for over 30,000 government retirees (current estimated number annually) every year as they now have an option to continue to be invested as per the existing investment pattern/PFM which was prevailing during their employment. 

This would help them — especially those uninitiated in retirement planning — ride their golden years without having to worry about making fresh decisions — on superannuation — on either the investment pattern or identifying the fund manager with a good track record to manage their retirement corpus. 


In the ‘default’ investment pattern, the NPS contributions of government employees were being invested in equities with a cap of 15 per cent. The remaining 85 per cent is being parked in mainly government securities and to some extent corporate bonds. 

Several government employees had approached PFRDA expressing their keenness to continue having the ‘default’ investment pattern (which was available during their working life) and same set of three pension fund managers (LIC Pension Fund, SBI Pension Fund and UTI Pension Fund) even post their retirement, sources said. 

They had pointed out that the relatively safe investment pattern was not available to them if they were to get into the “all citizens model” post retirement. Also they would have to go in for only one fund manager in the “All citizens model”, it was submitted. 

Given the track record of good quality returns from the “default” investment option — returns averaged about 7-8 per cent (higher than FD rates) even in pandemic period, many government retirees were wary to opt for any other NPS model that is fraught with higher risks given the higher equity component in investments in other models, they added.