Centre proposes to make life easy for millions of Employee Pension Scheme (EPS) pensioners with a decision to implement a new centralised pension payment system (CPPS) for this scheme from January 1,2025.
This decision, which has been taken and approved by Mansukh Mandaviya, Labour Minister and Chairman of Central Board of Trustees, EPF, is expected to benefit over 78 lakh EPS pensioners of Employee Provident Fund Organisation (EPFO). In 2023-24, the total pension payout under EPS for these over 78 lakh pensioners was over ₹15,000 crore.
The CPPS marks a major shift by establishing national-level centralised system, enabling pension disbursement through any bank, any branch across India, Mandaviya said.
The CPPS is a paradigm shift from the existing pension disbursement system that is decentralised, with each zonal/regional office of EPFO maintaining separate agreements with only 3-4 banks.
The CPPS would also ensure disbursement of pension throughout India without any need for transfer of Pension Payment Orders (PPO) from one office to another even when the pensioner moves from one location to another or changes his bank or branch. This would be a great relief to pensioners who move to their hometown after retirement.
Modernisation of the EPFO
“The approval of the CPPS marks a significant milestone in modernisation of the 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,” Mandaviya said.
This is a crucial step in the government’s ongoing efforts to transform the EPFO into a more robust, responsive, and tech-enabled organisation, committed to serving the needs of its members and pensioners better, he added.
Currently, various regional offices of EPFO had created their own database. There was no common database at the national level. With this latest approval, there will be a common centralised database of pensioners created, sources said.
This CPPS facility will be launched as part of EPFO’s ongoing IT modernisation project Centralised IT Enabled System (CITES 2.01) from January 1, 2025. In the next phase, CPPS will enable a smooth transition to Aadhaar-based payment system (ABPS), Mandaviya said.
“By harnessing advanced IT and banking technologies, it will offer a more efficient, seamless, and user-friendly experience for pensioners,” he said.
There will also be no need for pensioners to visit the branch for any verification at the time of commencement of pension and the pension shall be immediately credited upon release. In addition, EPFO expects a significant cost reduction in pension disbursement after moving to the new system.
The latest decision of Mandaviya is the second of the six modules that are to be implemented under the CITES 2.01. The first module, launched in mid August 2024, related to simplification of surrender of exemption from EPF scheme.