Pensioners, trade unions and government employees continue to expect a sharp 650% increase in the minimum pension to Rs 7,500 from the current Rs 1,000. With the festive season just around the corner, expectations of major benefits announcements from EPFO could be high. EPFO has on several occasions offered new measures and benefits to make it easier for pensioners to receive their pensions.
EPS-95 Pension Benefits:
As per the latest update on EPS-95 by EPFO, here are the latest and current benefits offered under the Employees Pension Scheme:
EPS ensures comprehensive benefits covering a broad spectrum of contingencies, including social security protection during old age for members and their families.
Launched on 16th November 1995, the "Employees' Pension Scheme" is a social security initiative by the Government of India, implemented under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. The scheme ensures financial security for employees after retirement, in the event of disability, or for their families in the event of death. Key benefits include superannuation pension, early pension, and family pension.
Eligible employees must be members of the Employees' Provident Fund Scheme, 1952, and their pay should not exceed Rs 15,000/- per month. The scheme is implemented by the Employees' Provident Fund Organisation (EPFO). Applications for this scheme are accepted both online and offline through EPFO portals and regional offices, as per the official website.
Will EPFO Hike Minimum Pension In Festive Season?
The government has generally offered some relief or announced key benefits for central government employees and pensioners on several occasions during the festive season. For instance, last year in Diwali, EPFO released pensions in advance without any delay so that pensioners could withdraw pensions during Diwali festivities.
Also, earlier this year, EPFO announced measures that enable the claiming of pensions more easily and quickly under the EPS scheme.
The government rolled out Centralised Pension Payments for all regional offices of EPFO across India.
In CPPS, not only will the pensioner be able to take a pension from any bank, but also, there will be no need for pensioners to visit the bank for any verification at the time of commencement of pension and the pension shall be immediately credited upon release.
Why Expectations To Hike Minimum Pension To Rs 7,500?
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.
The majority of pensioners and employees' unions are predicting a hike of 650% in the minimum pension to Rs 7,500 from Rs 1,000. However, the government is yet to make a decision on whether it plans to hike the minimum pension under EPS.
But Can Govt Hike Minimum Pension?
The Minister of State for Labour and Employment, Shobha Karandlaje, has shed some light on the minimum pension that is paid to retirees under EPS-95. He answered queries in the Rajya Sabha on July 24.
In his written reply to the queries, Karandlaje said, "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."
He explained that the EPS, 1995, is a "Defined Contribution-Defined Benefit" Social Security Scheme.
As per the minister, the corpus of the Employees' Pension Fund is made up of
(i) contribution by the employer @ 8.33 per cent of wages; and
(ii) contribution from Central Government through budgetary support @ 1.16 per cent of wages up to an amount of Rs . 15,000/- per month
"All benefits under the scheme are paid out of such accumulations. The fund is valued annually as mandated under paragraph 32 of the EPS, 1995, and as per the valuation of the fund as on 31.03.2019, there is an actuarial deficit," the minister added.
Despite the actuarial deficit, the minister pointed out that "However, the Government is providing a minimum pension of Rs. 1000 per month to the pensioners under the EPS, 1995 by providing budgetary support, which is in addition to the budgetary support of 1.16 per cent of wages provided annually towards EPS to Employees' Provident Fund Organisation (EPFO)."
Angel Broking in its latest report said, "The Government is presently evaluating proposals for raising the EPS 1995 minimum pension beyond Rs 1,000 per month. However, any revision must consider actuarial deficits, current fund contributions, and future obligations, while balancing the interests of pensioners and fiscal responsibility."
The brokerage's report explained as per paragraph 32 of the EPS, 1995, the fund must be valued annually. These valuations guide future decisions on payments, deficit management, and contribution adjustments. Any hike in minimum pension will likely require higher budgetary backing or revised contribution percentages.
Disclaimer: The write-up is just for information purposes. We have not done fundamental or technical analysis and have no opinion on article mentioned. Neither, the author, GoodReturns.In nor Greynium Information Technologies should be held liable for any losses. Please consult a professional advisor.
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