The Employees’ Provident Fund Organisation (EPFO) has approved a sevenfold increase in pension under the Employees’ Pension Scheme (EPS-95) in a significant enhancement of financial security for the retired workforce of India. The minimum pension, which was earlier ₹1,000 per month, will be increased to ₹7,500 per month from May 2025 and will greatly benefit more than 6 million pensioners. In addition, a Dearness Allowance (DA) linked to inflation will be payable from the date of increase, thus providing automatic adjustment to rising prices. This reform is in response to long-standing requests from pensioners and trade unions for assured dignity and financial security for the retirees.
Huge Pension Increase To ₹7,500
This latest decision of the EPFO to raise the minimum pension to ₹7,500 is a sevenfold jump from the earlier ₹1,000, which remained unchanged since 2014. This improvement is in response to the escalating cost of living, including expenses of housing, healthcare, and basic necessities that had started gravely encroaching on retirees’ finances. The DA will be pegged to the All India Consumer Price Index (AICPI), thereby ensuring the sustainability of pension through periodic adjustment to inflation. This change in the law now closes the gap between private-sector pensions and central government pension schemes.
Eligibility For The Pension Hike
The pension hike focuses on certain groups under the EPS-95 scheme; they stand eligible if they are above 58 years and have a minimum of 10 years of service linking their bank accounts to the Aadhar card. More than 6 million retirees, including those from the low-income and unorganized sectors, will be supported under this scheme, as they rely mostly on EPS for their pensions. Family members including widows or widowers, and dependent children of pensioners who have passed away might also be covered to ensure broader social security coverage.
Impact And Future Considerations
This landmark reform, apart from being a monthly payout, is an enhancement in the quality of life for the retiree; it enables better access to health care, nutrition, and housing. The central government and the EPFO shall share the expenditure on this scheme pending final approval from the Ministry of Labour and Central Board of Trustees. Though a ₹7,500 pension is a landmark step, the continuous discussions on possible amendments could extend to providing health insurance or increasing the salary ceiling for EPFO contributions to ₹21,000. Pensioners are also advised to keep their records updated for effortless payment of benefits.
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