What is Pension Payment Order (PPO)

Retirement comes with a much needed break from work, but it often comes with financial stress. From stressing about the monthly expenditure to becoming picky when buying essentials, retirement life comes with its own financial struggles. However, receiving a monthly pension that reduce the financial stress to some extent.

Employee Pension Scheme (EPS), a part of Employee Provident Fund (EPF) is one such pension scheme aimed to provide retired individuals with financial support, as well as financial security so that they can live their golden years without financial stress.

That said, when it comes to EPS there’s a term that often confuses pensioners the most. A most common question that arises is, “What is PPO?”. If you have come across this term numerous times but didn’t quite understand the concept, read on to more about the Pension Payment Order or PPO.

The answer to “What is PPO” is simple. PPO, also known as Pension Payment Order, is a unique 12-digit number designated to every pensioner under the Employee Provident Fund (EPF). This unique 12-digit number acts as a reference number for transactions and communications associated with the Employee Pension Scheme or EPS.

The bifurcation of the 12 digit number is like this –

• The first 5 digits of the PPO number represents the code number of the PPO issuing authority.
• The next 2 digits represent the issue year
• The next 4 digits indicate the PPO's sequential number, and
• The last digit acts as a digital check digit.

The PPO number is of utmost importance. Here’s why:

• It enables pensioners to keep a track of their pension, as well as receive it.
• Pension Payment Order Number can come in handy when filing grievances with EPFO (Employee Provident Fund Organization).
• Knowing your PPO number is also mandatory when you are submitting the annual life certificate. Failure to submit a life certificate can lead to pension being stopped.
• A PPO number is also mandatory for receiving pension in a new bank account due to closure of the earlier bank account.

Now that we know what is PPO & PPO number, it is important to know how you can find your PPO number.

The importance of PPO number has been well established above. If you are a pensioner who is enrolled in Employee Provident Scheme but doesn’t know their PPO number, you can easily find yours.

The Pension Payment Order Number is provided to subscribers of the Employee Provident Fund (EPF) after their retirement by the Employee Provident Fund Organization (EPFO). In case you didn’t get yours or forgot it, you can retrieve your PPO number through the EPFO portal.

By now you know what a Pension Payment Order number is, its importance and how you can find your PPO number if you have lost or misplaced it. However to better understand how you pension from EPF is calculated, you should have better understanding of the EPS or Employee Pension Scheme.

Employee Pension Scheme (EPS) was launched in 1995 with the objective of providing post-retirement financial security to salaried individuals who subscribed and contributed to EPF during their working years. The scheme ensures that the employees get a regular monthly pension when they reach their retirement age. Both new EPF members and existing members can avail the monthly pension benefits of EPS.

Employee Pension Scheme is a contribution-based scheme and it includes a portion of the EPF contribution made by both the employee and the employer.

The employee contributes a set percentage up to 12% of their basic salary and the dearness allowance every month in the EPF account. While the employer contributes equally, i.e. up to 12% of basic salary and dearness allowance (DA) of the employee into the account. Out of this total contribution equal to 24% of basic salary and DA, 8.67% is contributed towards EPS and the remainder is contributed to the EPF scheme.