Employees’ Pension Scheme (EPS) subscribers can now access pensions from any bank branch in India from today. The rule change was announced on September 4 last year, but it took effect on January 1. This is the outcome of the introduction of the Centralised Pension Payments System (CPPS), and the rollout is expected to benefit 78 lakh EPS pensioners.
As one would expect, this would be a more efficient and user-friendly experience for pensioners. Additionally, pensioners would not need to visit the branch for any verification at the time of commencement, and the pension would be immediately credited upon release.
Until yesterday, when a pensioner moved to a new town after retirement, they were supposed to opt for a transfer of pension payment orders from one office to another or to change bank or branch. With the rollout of CPPS, however, this would not be required anymore.
Thanks to the centralised pension disbursement, the earlier practice of each EPFO zonal office maintaining separate agreements with only 3-4 banks will be phased out.
Union Minister Mansukh Mandaviya had termed the approval of CPPS a significant milestone that would lead to the modernisation of EPFO.
“By enabling pensioners to receive their pensions from any bank, any branch, anywhere in the country, this initiative addresses the long-standing challenges faced by pensioners and ensures a seamless and efficient disbursement mechanism. This is a crucial step in our ongoing efforts to transform the EPFO into a more robust, responsive, and tech-enabled organization, committed to serving the needs of its members and pensioners better,” the minister said.
In 1995, the EPFO started EPS to provide members with a life-long pension. Out of the 12 percent employer contribution, it was mandated that 8.33 percent would go into EPS and the balance 3.67 percent into EPF.
The EPFO expects to achieve a considerable cost reduction in pension disbursement after moving to the new system.
(By arrangement with livemint.com)
