EPFO board to meet on November 23 to approve central pension payment system

The Employees’ Provident Fund Organisation’s (EPFO) central board of trustees will hold its first meeting of the current financial year on November 23 to approve the central pension payment system, which is set to roll out on January 1, The Economic Times reported on Thursday.

 

The board, which is chaired by the labour minister, is also expected to approve the EPFO’s account statement and Annual Report 2023-24 during the meeting. 

 

The last meeting of the Central Board of Trustees (CBT) of the EPFO was held in February 2024. The board had then announced an interest rate of 8.25 per cent on the provident fund for more than 70 million subscribers.

 

Provident fund is a savings scheme meant for an individual’s retirement. Compulsory for salaried individuals, it involves regular contributions from both employees and employers to the fund. There are certain other qualifying events, where EPFO allows partial withdrawal of the funds.

How will the new pension system ‘modernise’ EPFO?

The central pension payment system is meant to “modernise” the EFPO by establishing a national-level centralised system, which will enable pension disbursement through any bank, any branch across India, according to a press release issued by the Centre.

 

The Centre expects that this technology-based revamp of the system will benefit nearly 8 million EPS pensioners of EPFO. The CPPS will allow pension disbursement across India without needing to transfer Pension Payment Orders (PPO) when pensioners change locations or banks. This will greatly benefit retirees moving back to their hometowns, the labour ministry said.

 

“This facility will be launched as part of EPFO’s ongoing IT modernisation project Centralised IT Enabled System (CITES 2.01) from 1st January 2025. In the next phase, CPPS will enable a smooth transition to Aadhaar-based payment system (ABPS),” the ministry noted.

 

According to the proposal, pensioners won’t need to visit the branch for verification when their pension starts as it will be credited immediately upon release. Additionally, the EPFO anticipates significant cost savings in pension disbursement with the new system.