Pensioners Can Withdraw Pension from Any Bank from Next Year

Starting January 1, 2025, EPS subscribers can withdraw their pension from any bank across India. The Centralised Pension Payments Scheme (CPPS) under the Employee Pension Scheme (EPS) 1995, was approved on September 4, 2024, which would benefit approximately 78 lakh pensioners.

The CPPS would streamline the pension-paying process by enhancing administrative efficiencies and reducing the cost of pension disbursement while making the user experience seamless. Owing to this modernization of EPFO, pensioners will receive their pensions from any bank, any branch, anywhere in the country, especially easing the process for pensioners changing locations after retirement, which earlier necessitated the transfer of Pension Payment Orders (PPOs) from one office to another.

Additionally, a pensioner would not have to visit the branch of a bank for verification purposes during the commencement of pension, and the pension would be immediately credited upon release. In contrast to the existing decentralised pension disbursement system, with offices of EPFO maintaining separate agreements with only 3-4 banks, the CPPS is a significant step forward.

The growing number of beneficiaries entering the system has made IT-enabled changes increasingly necessary. According to the latest annual report from the Ministry of Labour, the number of recipients of the minimum monthly pension of Rs 1,000 is expected to increase by nearly 4 percent, rising from 2.05 million in FY23 to 2.13 million in FY24. For the effective implementation of the CPPS, it will be crucial to establish clear guidelines for banks to accommodate pensioners who wish to receive their pensions from a different bank, particularly when assessing the pensioners’ credibility in the absence of PPO transfers.