ISSUES FACED BY EPFO PENSIONERS

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Context:

The Union Government has announced that Provident Fund (PF) pensioners across India will receive their pension from any bank or branch from January 1, 2025.

Details

• The Employees’ Provident Fund Organisation (EPFO) pensioners under the Employees' Pension Scheme (EPS) face challenges such as outdated payment systems and increased minimum pensions.
• The Centralised Pension Payment System (CPPS) was announced to be implemented in January 2025 to streamline the pension process for retirees under the EPFO.

Pensioners Face Several Challenges

• Pensioners must transfer their Pension Payment Orders (PPO)  when relocating. A pensioner moving to a new city experiences delays as they need to transfer their PPO to the new location.
• Pensions can only be drawn through a limited number of empanelled banks and branches, restricting accessibility.
  • • Pensioners in remote areas face difficulties accessing their pensions due to a lack of nearby empanelled branches.
• The Current minimum pension of Rs 1,000 is insufficient due to the increasing cost of living.
• Extensive documentation requirements create difficulties and delays for pensioners.
  • • Requests for very old documents from pensioners and employers complicate and delay the processing of pension claims.
• Demanding a pension scheme that combines features of both the Old Pension Scheme (OPSC) and the New Pension Scheme (NPS) for comprehensive benefits.

Recent Steps

• Centralised Pension Payment System (CPPS) will be implemented from January 2025.
  • • Pensioners will be able to collect pensions from any bank branch.
    • It will reduce the need for PPO transfers when relocating, reducing delays and increasing convenience.
    • The challenge will be to ensure effective implementation and address practical difficulties.
• The announcement of an Aadhaar-based system transition system to eliminate the need for branch visits for verification.
  • • It will streamline the pension distribution process, potentially reducing administrative burdens and improving efficiency.
    • It will also lower administrative costs.

Way Forward

• The government should increase the minimum pension to better match current economic conditions.
  • • Need to find a way to adjust pension amounts while managing the financial sustainability of the pension fund.
• EPFO must enhance processing efficiency and speed up application review by reducing the complexity of documentation requirements to promote quicker approvals.
• The government should examine options to integrate the beneficial features of OPS and NPS.
  • • Pilot projects can be initiated to test a unified model before full implementation.
    • Engage with pensioners and unions to gather feedback on potential models.
• Regular adjustments in pension amount would ensure pensions remain sufficient.
  • • Increase the government’s contribution to the pension fund to increase financial stability.
    • Implement more efficient fund management practices to maximize available resources.

Must Read Articles:

CENTRALISED PENSION PAYMENTS SYSTEM (CPPS)

INTEGRATED PENSIONERS’ PORTAL

HIGHER PENSION UNDER THE EMPLOYEES’ PENSION SCHEME (EPS)

EPF BENEFITS

EPFO

OLD PENSION SCHEME VS NEW PENSION SCHEME

UNIFIED PENSION SCHEME (UPS)

Source:

The Hindu