The Employees’ Pension Scheme (EPS-95) is a critical social security program introduced in 1995 for workers in the organized sector. It guarantees a pension after retirement at 58 years, with an employer contribution of 8.33% and government contribution of 1.16% of wages capped at ₹15,000. The year 2025 shall see vital changes that would enhance benefits for around 78 lakh pensioners, solving a hundred-year-old demand for monetary security.
Proposed Pension Increase to ₹7,500
One landmark change in 2025 insertions includes increasing the minimum pension from ₹1,000 to ₹7,500 a month, as enforced by the Supreme Court and after long persistence by the EPS-95 National Agitation Committee (NAC). The hike of 650% shall be considered for Dearness Allowance (DA), i.e., they shall be increased with inflation, thus greatly improving the living standards of those pensioners who are currently fighting rising costs. The NAC has also demanded free medical care for the pensioners and their spouses.
Higher Pension Eligibility and Process
Post the Supreme Court’s 2022 verdict, any employee joining EPS-95 before September 1, 2014, or even contributing post that date, can avail a higher pension sans the ₹15,000 ceiling. Eligible members are required to jointly file an option form with the employers either online or at a regional EPF office. The deadline had later been extended to June 26, 2023, benefitting both pensioners and present contributors.
Financial and Implementation Challenges
The enhancement is an uphill task, given that an actuarial deficit exists in the EPS-95 fund, thereby requiring large budgetary allocations. The Government presently stands committed to ₹750–1,000 crore annually as minimum pension of ₹1,000; amidst the enhanced pension of ₹7,500, this budget will be heavy on the Government. A third party is now evaluating the scheme’s sustainability against a Request for Proposal, which marks the very first time any such evaluation has taken place.
Benefits and Future Outlook
The EPS-95 scheme has a range of pensions, such as those for widows, minors, orphans, and disability, catering to all social needs. Possibility of a pension of Rs 7,500 along with a DA and medical facility to solidify the retirement benefit. Pensioners should ensure they update their KYC details and provide Life Certificates online for time-bound disbursements. No hikes have been confirmed for the festive season of 2025, but talks so far indicate them to happen by mid-2025.
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