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New pension platform to ease payouts: Minister
The tech-based system will eliminate the need to move payment orders physically from one bank or location to another in case beneficiaries change their banks or place of residence, the minister said
The labour ministry will switch to a centralised pension-payment system from 2025, allowing retirees to receive monthly payouts from any bank or its branches in any location throughout the country, for which a large-scale test run was recently carried out.
The new platform for subscribers of the Employees’ Provident Fund Organisation (EPFO), the state-run retirement fund manager, is aimed at cutting down paperwork and enabling quicker processing, labour minister Mansukh Mandaviya said on Monday.
The tech-based system will eliminate the need to move payment orders physically from one bank or location to another in case beneficiaries change their banks or place of residence, the minister said.
The move will cover nearly 7.8 million subscribers of the Employees’ Pension Scheme 1995, a “defined contribution, defined benefit” financial-security plan applicable for all employees with a wage ceiling of ₹15,000 a month.
The centralised system will replace the existing decentralised pension disbursement system of the EPFO. Currently, each regional office of the EPFO maintains separate agreements with only a handful of banks, tying pensioners to those banks and their home branches.
Once the centralised platform is rolled out, fresh retirees will not be required to visit an assigned bank’s branch for verification to set up their pension accounts, enabling quicker payment transfers.
Under the trial run, conducted on October 29-30, the EPFO disbursed pensions worth ₹11 crore to over 49,000 accounts on an enhanced information-technology-based financial platform.
“Under the existing system, it can sometimes take three-four months for subscribers to get their first pension once they retire, if there is some discrepancy in paperwork or because of small problems. This requires a lot of running around. An upgraded system was overdue,” said a former EPFO board member, requesting anonymity.
