The government has approved a centralised pension payment system (CPPS) to allow pensioners under the Employees’ Pension Scheme (EPS) to draw pensions from any bank or branch across the country from January 1, 2025, Union Labour Minister Mansukh Mandaviya has said. In a statement issued by the ministry on Wednesday, the minister said, the decision marks a milestone in the modernisation of the Employees’ Provident Fund Organisation (EPFO). “By enabling pensioners to receive pensions from any bank, any branch, anywhere in the country”, it addresses their long-standing challenges and “ensures an efficient disbursement mechanism.”

It is expected to benefit 78 lakh EPS-95 pensioners. The decision comes as there have been many complaints regarding the aging IT infrastructure of EPFO, which regulates EPS, over delays in processing and disbursement of pensions. The high traffic volume on its platform has also hindered the efficient handling of the cases. To address this, EPFO has announced an IT 2.0 modernisation plan, including CPPS, to promote an Aadhaar-based payment system (ABPS).

Also Read: You Are Not Just Your Wealth! Leaving A Legacy Beyond Just Financial Assets

Current System For Pension Disbursement:

The latest move towards a centralised system will benefit retirees who returned to their hometowns and cities after retirement. Under the existing pension disbursement system, EPFO has different zones and regional offices, and each of them has onboarded 3-4 public sector banks as per the Reserve Bank of India (RBI) guidelines, for pension disbursement. Pensioners from one zone cannot receive pension even from an authorised bank in another zone. So, if a pensioner relocates to another city or wants to opt for another bank to receive pensions, the old system allows account transfer but it is a cumbersome process.

Transferring Pension Account To Another Bank Or Branch:

As per pension payment frequently asked questions of the State Bank of India (SBI):

1. “Pensioner can transfer his/ her pension account from one branch to another branch of the same bank within the same centre or at a different centre;

2. He/ she can transfer his/ her account from one authorized bank to another within the same centre (such transfers to be allowed only once a year);

3. He/ She can also transfer his/ her account from one authorized bank to another authorised bank at a different centre.”

In the first case, the transfer can be done at the authorised bank. However, the process is different for the point 2 and 3. In these cases, when a pensioner applies for account transfer, the old/existing bank branch manager intimates the new bank branch manager in a letter with a copy of the pensioner’s PPO. It also needs to send the copy to the Central Pension Accounting Office (CPAO), and the link branch of the old/existing bank branch, according to the Pensioners’ Portal.

After receiving the request letter and last payment certificates, the new bank branch will start pension payments. This branch also needs intimate its link branch providing the pension details. Simultaneously, the old bank and its link branch will ensure that the bank’s copy of the PPO has reached the new bank branch via its link branch to keep the process transparent. The process may take up to three months and may require many follow-up. The new bank pays the outstanding pension for three months from the last date of pension paid at the old bank.

Also Read: What Do You Do When Your Retirement Fund Falls Short? Here Are Some Tips

How The New System Helps?

According to the statement from the ministry, “CPPS would 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.”