Parliament designed this rule so that retired government servants receive a regular monthly income throughout retirement, rather than spending the entire corpus immediately. The annuity acts like a guaranteed monthly pension.
Source: NPS Rule 1
Why is 40% of the corpus locked into an annuity?
Related Questions
What happens if there is no eligible family member at the time of a subscriber's death?
What if my appointment order was dated December 2003 but I joined in February 2004 — which scheme applies?
Is the NPS corpus guaranteed?
Is the option irrevocable once the employee dies?
Is there a penalty for not contributing to Tier-II in a year?
This answer is for informational purposes only and does not constitute legal advice. Always refer to the original rules and consult competent authorities for official interpretation.