Good News For Pensioners? Minimum Pension For EPS Hiked By 650% To Rs 7,500 From Rs 1,000?

Pensioners under EPFO have been awaiting an increase in minimum pensions under their EPS scheme. There is a confusion and debate lately on whether EPFO has actually approved the hike in EPS to Rs 7,500 from the current Rs 1,000.

If the minimum pension is increased to Rs 7,500, then it will be a breathtaking 650% jump for pensioners who receive Rs 1,000 as of now. However, let us clarify that the government or EPFO has not made any official statement regarding approval of the hike to the minimum pension to Rs 7,500.

Hike Minimum Pension:

The desire and demand for a minimum pension have been circulating since last year. In February 2024, the Ministry of Labour & Employment informed that representations have been received from various stakeholders, including trade unions and public representatives, to increase the minimum pension under the Employees' Pension Scheme (EPS), 1995, from the existing Rs. 1000/- per month.

Recently, as per a Mathrubhumi report, in an RTI (Right to Information) query, EPFO clarified that no such decision has been taken yet on increasing pensions to Rs 7,500 from Rs 1,000.

EPFO revealed that although a High-Level Monitoring Committee had recommended increasing the minimum pension to Rs 2,000 and submitted the suggestion to the Finance Ministry, it was not accepted. EPFO revealed this in a reply to a query on June 18.

Under the PM Narendra Modi government, the Ministry of Labour & Employment provided the first minimum pension of Rs 1,000 per month to the pensioners of the Employees' Pension Scheme (EPS), 1995. This has been in place since September 1, 2014.

EPS 1995 is defined as a Contribution-Defined Benefit Social Security Scheme.

As of now, the corpus of the EPS is based on (i) contribution by the employer @ 8.33 per cent of wages; and (ii) contribution from the Central Government through budgetary support @ 1.16 per cent of wages, up to an amount of Rs 15,000/- per month.

Since then, the minimum pension under EPS has not been revised.

In a statement, the EPS-95 National Agitation Committee mentioned that the Finance Minister, Nirmala Sitharaman, assured the delegation that their demands would be carefully reviewed and considered with empathy. Earlier, she had assured that the demands of pensioners would be examined. This came as hope, and the committee recommended that the government should take firm action by declaring a minimum pension of Rs 7,500 along with Dearness Allowance in the upcoming budget. During the Budget 2025, no announcement related to the minimum pension under EPS was made.

Hence, pensioners await the hike in the minimum pension.

More than 6 million pensioners are expected to benefit from this new change. The implementation is predicted to begin either in April or May 2025 onward. However, EPFO is also expected to add a dearness allowance to pensions.

Benefits under Employees' Pension Scheme (EPS-95)

EPS-95 provides comprehensive benefits covering a broad spectrum of contingencies, which ensures social security protection during the old age of the members and their families.

As per the ministry, there are different categories of pension and withdrawal benefits available under EPS.

• Member Pension upon superannuation at 58 years of age.
• Early Member Pension from the age of 50 years.
• Disability Pension on permanent and total disablement during service.
• Widow/Widower Pension on the death of a Member or Pensioner.
• Children Pension for 2 children at a time till the age of 25 years on death of the member.
• Orphan Pension to 2 orphans at a time till the age of 25 years on death of a member when there is no spouse or on death of spouse.
• Disabled Children/Orphan Pension for the entire life of the disabled child/orphan.
• Nominee Pension on death of member and paid for life to a person duly nominated by the member in case there is no family as defined under EPS, 1995.
• Pension to dependent father/mother upon death of a member provided there is no family or nominee of the member.
• Withdrawal benefit on exit from service or on superannuation provided member has not rendered service eligible for pension.