EPS subscribers can withdraw pension from any bank starting 2025
Union Labour and Employment Minister Mansukh Mandaviya has approved the Centralized Pension Payment System (CPPS), under the Employees's Pension Scheme (EPS), 1995. This new system, set to be operational from January 1, 2025, will allow around 78 lakh EPS subscribers to withdraw their pensions from any bank across India. The CPPS is part of an ongoing initiative by the Ministry of Labour and Employment, to modernize and streamline pension disbursements through the Employees' Provident Fund Organisation (EPFO).
A significant milestone in EPFO's modernization
The introduction of the CPPS is seen as a significant step toward modernizing the EPFO. "This initiative addresses the long-standing challenges faced by pensioners and will ensure a seamless and efficient disbursement mechanism," Mandaviya stated. The system aims to provide a seamless, efficient, and user-friendly experience for pensioners by leveraging advanced IT and banking technologies.
CPPS to eliminate need for PPO transfer
The CPPS will eliminate the need for transferring Pension Payment Orders (PPO) from one office to another when a pensioner changes their location or bank. "This would be a great relief to pensioners who move to their hometown after retirement," the ministry noted. The system also removes the requirement for pensioners to visit the branch for verification at the time of pension commencement, ensuring immediate credit of pensions upon release.
CPPS: A shift from decentralized pension disbursement
The CPPS represents a significant departure from the existing decentralized pension disbursement system, where each zonal or regional office of EPFO maintains separate agreements with only three to four banks. The new centralized system is expected to significantly reduce costs associated with pension disbursements. This cost reduction is anticipated due to the elimination of multiple agreements and the streamlined process offered by the CPPS.
Future plans for CPPS include Aadhaar-based payment system
The ministry has revealed plans to integrate an Aadhaar-based payment system (ABPS) into the CPPS in its next phase. This integration is part of the government's ongoing IT modernization project, the Centralized IT-Enabled System. The move toward an ABPS is expected to further enhance the efficiency and accessibility of pension disbursements for EPS subscribers across India.
