The Centralised Pension Payment System (CPPS), set to launch on January 1, 2025, represents a significant reform in India’s pension disbursement framework. Announced by Labour Minister Mansukh Mandaviya, CPPS is a bold step towards modernising the Employees’ Provident Fund Organisation (EPFO) by making pension withdrawals accessible from any bank or branch nationwide. The initiative promises a hassle-free experience for the 78 lakh pensioners under the Employees’ Pension Scheme (EPS-95), ensuring that their pensions follow them, regardless of location or banking institution. One of the major benefits of CPPS is its elimination of the need for pensioners to transfer Pension Payment Orders (PPOs) when they move or change banks. This addresses a long-standing challenge faced by retirees, particularly those who relocate post-retirement to their hometowns. Under the current system, pensioners are often subjected to bureaucratic delays and inconveniences as they navigate regional EPFO offices and deal with a limited selection of banks. CPPS, by contrast, offers flexibility and removes the complexity of pension withdrawals.
This system, part of EPFO’s broader IT modernisation under CITES 2.01, represents a paradigm shift from the existing pension disbursement process. The centralised, tech-enabled structure will not only simplify the pension process but also lead to significant cost savings. The current practice, where each zonal or regional office maintains separate agreements with only 3-4 banks, is inefficient and cumbersome. By moving to a national-level system, CPPS will streamline operations, improving both time and resource management for the EPFO. CPPS also marks the beginning of a transition to an Aadhaar-based payment system, a further modernisation effort that will enhance transparency and efficiency in pension distribution. Furthermore, pensioners will no longer need to visit banks for verification upon the commencement of their pensions, with payments credited immediately upon release. This user-friendly system is especially significant for senior citizens, for whom convenience and accessibility are paramount. Modernisation is the key. By embracing advanced IT and banking technologies, this initiative will reduce procedural barriers, improve accessibility, and bring much-needed relief to pensioners across the country.
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