There is good news for pensioners. The government has made changes in some important rules related to pension, which will be applicable from 1 February 2025. The purpose of these new rules is to increase the convenience of pensioners and make their lives easier. These changes are mainly related to pension payment system, pension withdrawal and pension updates.
With the implementation of these new rules, pensioners will get many benefits. They will no longer have to depend on any particular bank branch to get pension. Also, many pension related procedures will become easier. Let us know in detail about these new rules and understand how these will affect the lives of pensioners.
New rules for pensioners: at a glance
Rule | Description |
Centralized pension payment system | Pension withdrawal from any bank branch |
Parseline withdrawal | Partial withdrawal permission to 25% of pension amount |
Automatic pension update | Increase in pension automatically every year |
Digital Life Certificate | Facility to submit online life certificate |
Pension slip email | Get pension slip by e-mail every month |
Gratuity Limit | Maximum gratuity amount increased |
Centralized Pension Payment System (CPPS): Pension withdrawal from any bank
Since 1 February 2025, a new Centralized Pension Payment System (CPPS) is being implemented. Under this new system, pensioners will now be able to remove their pension from any bank or branch of the country. This is a big change, because earlier pensioners had to remove their pension from only one fixed bank branch.
This new rule has some major advantages:
- Facility: Pensioners can now remove pension from any bank branch, which is convenient for them.
- Time savings: Now there will be no need to wait in long queues.
- Ease of travel: There will be no problem in removing pension even when going to another city or state.
- Freedom to change bank: Pensioners can now easily change their bank.
The IT of CPPS system EPFO is part of the modernization scheme. This system will also eliminate the need for transfer of pension payment order (PPO). This will also make it easier for pensioners to change their residence or open a new bank account.
Parseline withdrawal: Pension to Partial withdrawal facility
Another significant change is the facility of Partial Withdrawal from Pension. From 1 February 2025, pensioners will be able to withdraw up to 25% of their total pension amount. This facility will be available under certain circumstances, such as:
- Children’s higher education
- Children’s wedding
- To buy or build a house
- To treat severe illness
- To start a startup
- For skill development
The purpose of this rule is to provide financial flexibility to pensioners. However, it is important to note that this feature should be used carefully, so that sufficient pension amount remains for the future.
Automatic pension update: automated increase every year
Another significant change is the automatic update system of pension. Under this new rule:
- Every year the pension amount will increase automatically.
- This increase will be done according to inflation rate.
- Pensioners will no longer need to apply separately to increase pension every time.
This system will help maintain the standard of living of pensioners and will relieve them from increasing inflation.
Digital Life Certificate: Online Life Certificate
While stepping into the digital age, the government has also made the process of submission of life certificate digital. Now pensioners can submit their life certificate online. With this, they will get rid of the hassle of submitting physical certificates every year.
Benefits of this new system:
- Saving time: Certificate can be submitted from home.
- Facility: Particularly beneficial for elderly and sick pensioners.
- Reduction in errors: Digital process will reduce the chances of human errors.
- Fast processing: Processing and verification of certificate will be faster.
Pension Slip Email: Digital Pension slip every month
Under another digital initiative, now pensioners will be sent to pension slip e-mail every month. Benefits of this new rule:
- Paperless Process: Environmentally friendly.
- Easy record keeping: Digital slip can be easily stored and accessed.
- Quick Information: As soon as the pension credit is done, you will get immediate information.
- Transparency: Detailed description of pension amount, deduction etc. will be available.
Increase in gratuity limit: profit of high amount
The government has also increased the maximum limit of gratuity. This change is a big advantage for retired employees. According to the new rule:
- The maximum limit of gratuity has been increased to Rs 25 lakh.
- This amount will be tax free.
- Employees will get a lump sum at the time of retirement.
This change will help the employees who retired in planning their future.
Change in pension calculation: new formula
The method of calculating pension has also been changed. According to the new formula:
- Pension = (50%of the last salary) x (Number of years / 33 of service / 33)
- Minimum pension: Rs 9,000 per month
- Maximum pension: 50% of final salary
This new formula will ensure proper pension to pensioners as per their service.
Rejection: This article is only for information purposes and the information given in it is not completely responsible for accuracy. Readers are advised to consult the concerned authorities or experts before taking any financial decision. It is necessary to ensure that all information is updated and correct, as rules and policies can change from time to time.