Withdraw your pension from any bank in India from Jan 1: Here's how
New Delhi, Sep 5, 2024
Centralised system will ensures pensions are disbursed nationwide without transferring Pension Payment Orders (PPOs), even if the pensioner relocates or changes banks
Union Minister of Labour and Employment and Chairperson, Central Board of Trustees, EPF has approved the proposal for a Centralised Pension Payment System (CPPS) for Employees’ Pension Scheme, 1995. The Centralised Pension Payment System (CPPS) will start on January 1. (Rework the sentence and simplify)
Key features of CPPS
National accessibility: Pensioners can access funds from any bank or branch nationwide.
Elimination of transfer requirements: No need to transfer Pension Payment Orders (PPO) when relocating or changing banks.
Aadhaar integration: Plans include a transition to an Aadhaar-based payment system.
Cost reduction: EPFO expects significant savings in pension disbursement costs.
Benefits for pensioners:
The CPPS is expected to benefit more than 7.8 million EPS-95 pensioners. It addresses challenges faced by pensioners, particularly those who move to their hometowns after retirement. The new system promises a more efficient, seamless, and user-friendly experience by leveraging advanced IT and banking technologies.
“This initiative addresses the long-standing challenges faced by pensioners and ensures a seamless and efficient disbursement mechanism,” said Labour and Employment Minister Mansukh L Mandaviya, who also chairs EPFO's Central Board of Trustees.
Implementation and plans:
The CPPS will be implemented as part of EPFO's ongoing IT modernisation project, Centralised IT Enabled System (CITES 2.01). This marks a significant departure from the current system, where each EPFO zonal/regional office maintains separate agreements with only 3-4 banks.
Under the new system, pensioners will no longer need to visit bank branches for verification when commencing their pension. Payments will be credited immediately upon release.
To be eligible for benefits under the Employees' Pension Scheme (EPS) in India, an individual generally needs to meet the following criteria:
Who is eligible for EPS pension
The individual must be a member of the Employees' Provident Fund Organisation (EPFO).
The individual should have completed a minimum of 10 years of service.
The individual should have reached the age of 58 to start receiving the pension.
The individual can opt to withdraw the EPS at a reduced rate from the age of 50 years.
The individual can choose to defer their pension up to the age of 60. For each year of deferral, there is an additional rate of 4 per cent on the pension amount.
Members who have contributed to EPS are eligible to receive a pension based on these guidelines, ensuring a consistent income post-retirement.
[The Business Standard]
