Pension fund regulator PFRDA has chosen state-run LIC as the default annuity service provider for subscribers exiting from New Pension System (NPS) and seeking withdrawal of accumulated pension wealth.

PFRDA has empanelled seven Annuity Service Providers (ASPs) for providing annuity services to NPS subscribers.

While subscribers are required to select an empanelled ASP along with an annuity scheme from those offered by the chosen ASP at the time of exiting from NPS, PFRDA has now decided to assist subscribers by providing a default option.

"LIC has been chosen as the default ASP and is applicable for all variants of NPS. The default option is being purely provided in the subscribers' interest and to avoid any delay in claim processing," said a PFRDA official.

The default scheme offers annuity -- a policy by an insurer designed to provide payments to the holder at specified intervals -- for life with a provision of 100 per cent of the annuity payable to spouse during his/her life on death of annuitant.

Besides LIC, other ASPs include SBI Life, ICICI Prudential Life, Bajaj Allianz Life, Star Union Dai-Ichi Life and Reliance Life Insurance.

Under the provisions of NPS, a maximum of 60 per cent of corpus accumulated at the time of exit, which is normally on the attainment of 60 years of age, can be withdrawn but a minimum 40 per cent of corpus has to be utilised for purchasing an annuity from one of the empanelled ASPs.

The NPS was introduced for the new recruits who join government service on or after January 1, 2004. At the end of 2012, over 42 lakh subscriptions were enrolled with a corpus of over Rs 26,000 crore.

From May 2009, the NPS was opened up for all citizens in India to join on a voluntary basis.