Established in 1995 under the EPF framework, the Employees’ Pension Scheme (EPS-95) offers monthly pensions to retirees in the organized sector in India. Since 2014, a minimum pension of ₹1,000 has been guaranteed. With the rising cost of living, the labor unions and pensioners have been demanding since awhile for a hike in the minimum pension from ₹1,000 to ₹7,500, considering the current amount is too meagre even to sustain basic needs.
Government’s Response in Parliament
During a recent session in the Lok Sabha, MPs Vaiko and M. Shanmugam raised queries about the issue of the minimum pension of the EPS-95 being kept at a low fixed rate. Responding to the queries of these two MPs, the Ministry of Finance acknowledged having received representations from several stakeholders including trade unions for an increase in pension amount. However, Minister of State for Finance, Pankaj Chaudhary, added that there was no decision or timeline set for the announcement of an increase, particularly not for the festive season of 2025. Meanwhile, the government continues to meet the budgetary support of ₹750-1,000 crore per year for the payment of ₹1,000 pension to 36.6 lakh pensioners.
Financial Constraints and Actuarial Deficit
The government has registered an actuarial deficit in the EPS-95 fund and made a significant enhancement in pension if no further budgetary allocations were made. A parliamentary panel had earlier suggested a review to consider the sustainability of the scheme, remarking that ₹1,000 was not adequate for the sustenance of the retirees. Though there have been calls for an increase to ₹7,500 by the EPS-95 National Agitation Committee, budgetary-T constraints stop any immediate implementation. Moreover, the committee had proposed that pensions be put on an inflationary track through Dearness Allowance (DA).
Eligibility and the Present Pension Scheme
The scheme requires a minimum of 10 years of service, with eligibility for pension at age 58 (early pension is payable at 50 at a reduction of 4% for every year short of 58). Contributors become entitled to pension with a minimum contribution of one month in case of death or disability. The pension would be (Pensionable salary × Years of service)/70, with a contribution of 8.33% of wages from the employer and 1.16% from the government, capped at ₹15,000.
Future Outlook and Pendencies of Retired People
No guaranteed festive-season hike at this point would seem, but `given ongoing discussions regarding a possible increase to ₹7,500 by virtue of a Supreme Court verdict and trade-union support’. Pensioners demand DA recognition and free medical care. The government is reviewing it, but time-wise, budgetary pressures and, on-the-other-hand, the financial stability of the EPFO, are big hurdles; further updates are expected by mid-2025.
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