E-pension

E-pension refers to disbursement of pension through electronic means. We discuss a case study of Himachal Pradesh as

E-PENSION in Himachal Pradesh
 ePension  application  is  the  result  of  major  process  re-engineering  by  the  Government  of  Himachal  Pradesh,  Department  of  Finance,  Treasury  Accounts  and Lotteries  benefiting  senior  citizens.  It  involves  complete  change  in  the  pension
disbursement  system  for  HP  Government  pensioners.  The  web  interface  enables  the HP  Government  pensioners  to  know  the  status  and  details  of  their  monthly  pension through  Internet  where  complete  pension  detail  for the  last  12  months  is  available.
Pension forms being submitted by the retiring Government servants were modified in consultation with the AG-HP.
 
OLD SYSTEM OF DISBURSEMENT OF PENSION
The  state  government  pensioners  in  the  state  were  getting  their  pension  through treasuries  and  banks  as  per  the  options  exercised  by  the  pensioners.  The  system  of payment  of  pension  to  the  state  government  pensioners  prior  to  2006  (termed  as  old
system hereinafter) utilized the reach of banks as bank branches are present through out, even in remotest of the locations in the state.
In  old  system,  pensioners  had  the  option  to  draw  pension  from  any  PDA  (i.e. Pension Disbursing Agency).The PDAs were either the authorized banks branches or the treasuries.  The  PPOs  in respect  of  all  classes  of  pensioners  were  received  from  Pension
Authorizing  Agency  i.e.  the  AG  in  district  treasuries.  Registers  (TR  36)  were  being maintained in district treasuries, in which most of the information contained in the PPO was entered manually. After this the PPOs were sent to the PDAs. The pension payment
to  the  pensioners  on  the  basis  of  authorization  in the  PPO  was  the  responsibility  of  the PDA.  There  was  no  intervention  of  treasury  in  the  pension  payment.  District  treasuries entered the paid pension vouchers in the accounts.

There were three systems of pension payment in the state.
1.  Payment  by  banks:  In  this  system,  the  pensioners  opened  accounts  in  bank branches  of  seven  banks  (SBI,SBoP,UCO,PNB,UBI,CBI,BoI)  authorized  for  pension payment.  Pensioner’s  pension  accounts  were  credited  by  the  branches  on  1st of  every month on the basis of entitlements authorized in the PPO. Pensioners were not required to visit  banks  for  getting  pension.  Calculation  of  entitlements  was  responsibility  of  paying branch.
2.  Payment  by  banking  treasuries:  In  banking  treasuries  separate  bills  for  each pensioner used to be prepared and passed by treasury. Passed bills were then given to the pensioners who would then present these bills at the bank branch attached to the treasury
for getting payment.   
3.  Payment by non-banking treasuries: In non – banking treasuries separate bills for each pensioner used to be prepared and passed. Cash was also disbursed to pensioners on the basis of passed bills at the treasury.

In  the  latter  two  systems,  bills  for  each  pensioner  were  prepared  and  personal monthly appearance of pensioner in treasuries was mandatory.
 
MAJOR PROBLEMS  IN OLD SYSTEM  
1.  Number of pensioners was quite large (approximately 75000 in 2006) and was increasing  at  the  rate  of  around  2500  pensioners  per  year.  Also  all  the documents  were  routed  through  District  Treasury.  Both  these  reasons  lead  to increase  in  work  load.  Manual  system  in  Treasuries added  to  the  problems because it was not only prone to errors and time consuming but was out of tune in the age of e-Governance. Huge data was difficult to maintain. In the absence of properly maintained records over/under payment were being done and it was difficult to detect such cases.  
2.  There are a lot of wrong payments made by the PDA e.g.

(i)  Restoration of pension (commuted portion) was not being done in time.
(ii)  A lot of pensioners continued to draw their pension on un-revised rates.
(iii)  Necessary  certificates  were  not  taken  as  a  result  of  which  pension  accounts  continued  to  be  credited  even  after  death of  pensioner/family pensioner.
(iv)  Banks did not make Life Time Arrears payments in case of death of the  pensioners.
(v)  Banks  official,  in  many  cases,  were  not  able  to  calculate  entitlements properly leading to overpayments or underpayments.
(vi)  Many  a  times,  DA  was  not  given  at  proper  rate.  DA  and  arrear  on  DA were  delayed  by  bank  branches  because  of  none  availability  of Government instructions.
(vii)  Re-employed  pensioners  were  getting  full  pension  whereas  they  were entitled to basic pension only.
 
3.  No entry was being made in the PPO regarding pension paid to the pensioner which  was  the  mandatory  provision  of  the  Public  Sector  Bank  Scheme notified by the Government.  
4.  All the cases of over/under payments caused a lot of harassment to pensioners. Recoveries  were  not  affected  by  banks.  If  recoveries  were  made,  accounting of  recoveries  was  not  being  done.  Sometimes  banks  affected  recoveries  by
way of short drawls. Recovered amount by this method remained unaccounted in almost all the cases.
5.  In  the  case  of  pensioners  who  served  during  Punjab time,  some  portion  of pensionary liability is allocated to the Punjab. Such allocations are reimbursed by Punjab. Banks in most of the cases unaware of accounting procedure kept
whole  amount  in  HP  allocation.  Thus,  the  State  Government  incurred recurring losses on account of wrong allocation.
6.  There was no uniformity in the system of pension payment as there were three systems  of  pension  disbursement  in  state.  It  was  not  possible  to  compile  any information and retrieval of data was almost impossible.   
7.  Pensioners had a lot of grievances and banks were not in a position to redress grievances  due  to  lack  of  knowledge  of  pension  rules.  Redressal  was  time consuming and tedious as pension records were with banks.

THE COMPUTERISED SYSTEM :  e-Pension
In  order  to  remove  all  the  problems  mentioned  above  pension disbursement  was  computerized  through  the  e-pension  system.  The  pilot  run of the system was done successfully in one of the twelve districts of the state. In  2006  ,  complete  rollout  of  the  system  was  done. Major  features  of  e-pension are:
1. In e-pension, option given to pensioners to draw their pension from treasuries  was  withdrawn.  All  pensioners  drawing  pension  from  treasuries were shifted to the banks.
2.  More  banks  were  authorized  for  pension  payment  through  out  the state.  All  pensioners  shifted  from  treasuries  opened  accounts  in  authorized bank branches.
3.  PPOs  received  from  the  AG  are  not  sent  to  the  PDAs  but  are retained in the district treasuries.
4.The    data  base  in  the  form  of  PDA-Master  and  PPO Master  was created at the District Treasuries. Detailed entry of approximately 75000 PPO was done in-house by the officials of the department.
5.  PDA-Master  is  the  list  of  designated  bank  branches  in  the  District which  are  disbursing  pension  to  HP  Pensioners.  This  list  is
maintained/updated centrally at shimla.
6.  PPO  Master  file  is  the  data  base  of  all  pensioners  in  the  District containing  all  the  relevant  information  required  for  pension  payment.  The PPO Master is created and updated at District Treasuries on the basis of PPOs received from the AG.
7. All the PPO files of pensioners being maintained at different banks were recalled at the concerned District Treasuries.
8. On the basis of PPO Master created in the District Treasuries, Bank branch  wise  monthly  pension  payment  scroll  is  generated  for  all  branches  in district. Thus the responsibility of pension processing and calculation has now shifted to treasuries. The scroll is sent to the link bank branch of the district by 23rd  of the preceding month in advance.
9. The branch wise pension payment scrolls are then sent to the paying branches  of  the  district  by  the  link  branch  for  crediting  pensioner’s  accounts strictly  as  per  the  scroll  sent  by  district  treasuries.  All  the  PDAs  in  the  state
have now been converted from active PDAs, calculating/processing pension to passive PDAs , making pension payment on the  basis of scroll of the district treasuries.
10.  After  crediting  bank  accounts  of  the  pensioners,  paying  branches return  the  scroll  through  link  branches  to  district  treasuries  for  entering  into the accounts.
11.  All  the  necessary  certificates  continue  to  be  taken  by  bank branches. These are then sent to District Treasury along with scrolls.
12. Pensioners of other states drawing pension in treasuries were also shifted  to  bank  branches  located  at  the  place  from where  they  were  taking pension through Treasuries.
13.  The  scroll  generated  by  District  Treasury  was initially  sent  to  the banks  in  triplicate.  Triplicate  copy  of  scroll  was retained  by  the  branch. Paying  branches  returned  payment  scroll  in  duplicate  in  the  form  of  paid vouchers to link branch which retained duplicate copy. Original copy was sent to District Treasury for accounting purpose. Later the soft copy of scroll was started  through  which  banks  upload  payment  data  directly  into  their  CBS platform thereby crediting pension accounts of beneficiaries.
14.  Pension  forms  being  submitted  to  the  AG  by  the  retiring government employees  were modified by making it mandatory to enter  bank account and bank branch details.

BENEFITS OF  e_PENSION
 The e-pension system took care of all the shortcomings of manual system of pension disbursement. The benefits of the e-Pension are as under:-
 
1.  Every  state  pensioner  is  getting  pension  through  some  bank  branch.  No cash disbursal from Treasuries and Banks don’t process pension
2. Calculation of pension entitlement amounts at District Treasury beforehand  
3. More local banks involved for pension distribution
4.Instant Revision of Pension in all District Treasuries in case of grant of DA other  arrears, DA merger, pension revision etc.
5.  The  pensioners  can  know  details  of  pension  (break-up  in  terms  of  basic, DP, DA, arrears-if any, recoveries- if any, net pension)  
6. Web Interface for Pensioners at  https://himachal.nic.in/ePension    
7.  Through  web-interface  pensioner can  see  pension  for  the  last  12-months and get print out for Income Tax return filing purposes.  
8. Efficient & fast Grievance Redressal through DTO by Email  
9.  Recovery  of  huge  amounts  on  account  of  pre-1966 pension  and  over-payments on account of wrong payment (book adjustments)
10. Savings on account of commission being paid to the banks for PPO maintenance & pension calculation and disbursement
11.  Easy  disbursal  since  no  cash  transactions  are  carried  out  at  the District/Sub-Treasuries
12. MIS reports also generated which was not possible in manual system
13.  Number of active PDAs reduced from more than 600 to just 14
14. Software enabled checks for restoration, stopping pension, over-payments, arrear calculation  
15.System utilises the reach of banks and knowledge of pension system in treasuries to the benefit of the pensioners.