Context:
Recently, the Union Labor Ministry has cleared a proposal for a Centralized Pension Payment System (CPPS) under the Employees’ Pension Scheme, 1995.
More on the news
- CPPS will replace the current decentralized pension disbursement system, where each EPFO Zonal/Regional Office maintains individual arrangements with just three to four banks.
Significance:
- This change will create a smoother and more efficient way to distribute pensions.
- Pension Payment Orders no longer need to be transferred between offices when pensioners move or change their bank or branch.
- The CPPS is set to help over 78 lakh EPFO EPS pensioners, particularly those returning to their hometowns after retirement.
- EPFO expects significant cost savings in pension payouts with this new system.
- Pensioners won’t need to visit the branch for verification; their pensions will be credited immediately upon release.
Centralized Pension Payment System (CPPS)
- The CPPS provides a national-level centralized system allowing pension payouts through any bank or branch in India.
- The CPPS will be introduced as part of the EPFO’s IT modernization project, Centralized IT Enabled System (CITES 2.01). This update aims to make pension payments more efficient and accessible.
Benefits of the CPPS:
- Nationwide Access
- Enhanced Convenience in accessing pensions.
- •Integration with the Aadhaar-Based Payment System (ABPS) and increased efficiency.
Who is eligible for a pension?
Individuals have to fulfill the following criteria to be eligible for availing benefits under the Employees’ Pension Scheme (EPS).
- Should be a member of EPFO
- Should have completed 10 years of service
- Has reached the age of 58
- They can also withdraw the EPS at a reduced rate from the age of 50 years, and can also defer the pension for two years (up to 60 years of age) after which they will get a pension at an additional rate of 4% for each year.