Will EPS Pension Rise to ₹7,500? Unions Push, Panel Urges Action

The Employees’ Pension Scheme (EPS), also referred to as EPS-95, was launched in 1995 with the aim of providing a steady post-retirement income to employees in the organised sector. Administered by the Employees’ Provident Fund Organisation (EPFO), the scheme offers pension benefits to employees who contribute to it for a minimum of 10 years.

In 2014, the government fixed the minimum guaranteed pension under EPS at ₹1,000. However, since then, no revisions have been made despite growing demands from employee groups and unions.

Why Are Unions Demanding a Pension Hike?

Over the years, multiple trade unions and associations representing pensioners have consistently raised their voices for a revision in the minimum pension amount. Their primary concerns stem from:

• Rising inflation and cost of living

• Inadequacy of the current ₹1,000 pension

• Lack of periodic revision since 2014

The unions argue that ₹1,000 is no longer sufficient to sustain even basic expenses in today’s economy. They are urging the government to raise the amount to ₹7,500 per month and to include a Dearness Allowance (DA) component to buffer the effects of inflation.

What Has the Parliamentary Panel Suggested?

A ray of hope emerged when a parliamentary standing committee, chaired by MP Basavaraj Bommai, recommended a third-party evaluation of the EPS. This marks the first time in 3 decades that such an assessment is being undertaken.

The committee has:

• Asked the Labour Ministry to expedite the review process

• Suggested a target timeline for completion by the end of 2025

• Highlighted the urgency of the matter due to rising inflation

In its report, the panel noted that while living costs have increased manifold, the pension amount has remained static. This discrepancy, the committee observed, warrants immediate attention.

Read More: EPFO Minimum Pension Hike: Will Govt Approve ₹7,500 Minimum Pension Demand?

What Has the Labour Ministry Disclosed?

Responding to the committee, the Labour Ministry revealed that it had proposed a hike in the minimum pension to ₹2,000 in 2020. However, this proposal was not approved by the Finance Ministry at the time. The same proposal resurfaced during budget discussions for the fiscal year 2024-25.

The Ministry also informed the panel that the first-ever third-party evaluation of the EPS is underway, initiated through a Request for Proposal (RFP). It admitted that no comprehensive review of the scheme has been done in the past 30 years.

Current Pension Vs Living Costs: The Growing Gap

The panel’s concerns reflect a broader issue: the widening gap between pension payouts and the actual cost of living. Between 2014 and 2024, inflation has significantly eroded the real value of the pension amount. The ₹1,000 monthly benefit that may have sufficed in the past now falls short of even covering essential needs like rent, healthcare, and groceries.

Conclusion

While the third-party evaluation and ongoing discussions represent a significant step forward, the final outcome depends on the government’s willingness to act on these recommendations. For millions of pensioners across the country, a revision in the pension amount could offer much-needed financial relief amidst growing economic pressures.

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