Launch of e-PPO will plug errors in defence pensions

Mubarak Ansari
Monday, 31 July 2017

Pune: To curb inordinate delays and wrongdoings in disbursing pensions to Armed Forces personnel and defence civilians, soon e-PPO (Pension Payment Order) will be launched. The Comptroller and Auditor General (CAG) of India, which submitted its report about disbursement of defence pension, had found many errors.

The defence pension (for Army, Navy and Air Force) is disbursed to over 30 lakh pensioners involving an expenditure of over Rs 60,000 crore every year.

Pune: To curb inordinate delays and wrongdoings in disbursing pensions to Armed Forces personnel and defence civilians, soon e-PPO (Pension Payment Order) will be launched. The Comptroller and Auditor General (CAG) of India, which submitted its report about disbursement of defence pension, had found many errors.

The defence pension (for Army, Navy and Air Force) is disbursed to over 30 lakh pensioners involving an expenditure of over Rs 60,000 crore every year.

New pension system
Veena Prasad, Controller General of Defence Accounts, last week, said that the process is on for switchover to new e-pension system where PPO will be directly sent to concerned Pension Disbursing Agencies (PDA) and ex-servicemen’s e-mail and pension will be directly deposited to concerned ex-servicemen’s bank accounts. E-PPO will ensure timely and correct payment of pension.

Human error high
The CAG review from 2011-12 to 2015-16 found that the PDAs were building their databases of the pensioners’ profiles by manually transcribing into their systems the data from the PPOs issued by the Pension Sanctioning Authorities (PSA). 

This system was prone to transcription error. Further, since the PDAs were authorised to carry out the revisions of the pensions, detection of errors was dependent on timely submission of the payment scrolls to the PCDA (P) and comprehensive audit.

Seamless structure
Non-integration of the databases by various agencies was creating problems. These deficiencies highlighted the need for a robust pension disbursement system that used the advancements in IT. The structure of the pension system would be such that the pensioners’ critical information would flow seamlessly and electronically from the point of origin (e. g. the Record Offices) to the destination.

Aadhaar mandatory
The Ministry of Defence has informed CAG that instructions had been issued to include PAN, Aadhaar, mobile number, and email addresses of the pensioners and their dependents. Further, instructions have been issued that no PPO would be generated without Aadhaar number for Indian nationals. MoD stated that action on the points suggested regarding online connectivity, automated flow of information was in hand and a request for proposal had been issued. 

Some irregularities

- Delays in getting information from the units contributed significantly to the delays in processing of the pension cases. 
- Bank of Maharashtra, Pune, didn’t deduct TDS in 32,985 cases
- Date of Birth of 83 family pensioners was same as that of original service pensioner in soft data of CPPC Central Bank of India, Mumbai.
- In Central Bank of India, Mumbai, pension was credited twice to the accounts of pensioners against identical PPOs, resulting in overpayment of Rs 34.94 lakh for the period 2013-16.
- RBI had weak control for ensuring that banks made correct disbursements of the pensions, and submitted accounts of the disbursements made by them in time.  
- SBI, Mumbai, paid Rs 12.56 lakh during 2011-12 to 2015-16 to four pensioners of Central Reserve Police Force. 
- Test audit also indicated several cases of double payments 
- Irregularities in disbursement of pension such as pensions of multiple pensioners being credited to one account, pension being paid by the PDA without PPOs, and certain instances of pension being paid from the defence head to the pensioners of other departments. 

CAG suggestions

- RBI should make the reimbursement to the banks conditional upon the proof of submission of the payment scroll to the PCDA (P). 
- The three pillars - Record Offices, PSAs, and PDAs- should be connected online.
- PAN number should be captured in the original profile maintained by the ROs and travel through the chain of transmission to the PDAs to facilitate TDS.
- Aadhaar number should be captured by the ROs while the person is in service.

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