26 Oct 2024        15:14:42 pm

Economics

Centralized Pension Payment System (CPPS)

Tags : Centralized Pension Payment System (CPPS)

Topic: Government Initiatives

Why in the news?

• Union Minister of Labour and Employment and Chairperson, Central Board of Trustees, EPF has approved the proposal for a Centralized Pension Payment System (CPPS) for Employees’ Pension Scheme, 1995. 
• The CPPS marks a major shift by establishing a national-level centralized system, enabling pension disbursement through any bank, any branch across India.

Source: PIB

About Centralized Pension Payment System (CPPS):

• It provides a national-level centralized system allowing pension payouts through any bank or branch in India.
• It replaces the current decentralized pension disbursement system, where each EPFO Zonal/Regional Office maintains individual arrangements with just three to four banks.
• 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.

• It will be launched as part of EPFO’s ongoing IT modernization project Centralized IT Enabled System (CITES 2.01) from 1st January 2025.
• It 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.
• It is estimated to benefit more than 78 lakh EPFO EPS pensioners, and will particularly benefit retirees who relocate to their hometown after retirement.

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