EPS-95 pension hike: Is the government planning to raise the minimum pension amount?

Hopes of a substantial increase in the Employees’ Pension Scheme (EPS-95) payout have dimmed once again, with the Centre confirming that it is not considering raising the minimum monthly pension from the current Rs 1,000 to Rs 7,500. The clarification came from Shobha Karandlaje, Minister of State for Labour and Employment, in a written reply to the Lok Sabha on Monday.

Responding to a question from MP Balya Mama Suresh Gopinath Mhatre, Karandlaje said the EPS fund is under actuarial stress. “As per the valuation of the fund as on March 31, 2019, there is an actuarial deficit,” she said. This deficit, she indicated, restricts the government’s ability to enhance pension benefits at this stage.

Explaining the structure of EPS-95, the minister described it as a “defined contribution-defined benefit” social security scheme. The pension corpus is built from two components: an employer contribution of 8.33% of wages and a central government contribution of 1.16% of wages, up to a wage ceiling of Rs 15,000 per month. All benefits, present and future, are paid solely from these accumulations.

The minister’s reply came amid growing demands from pensioners’ associations for a revision in the minimum pension, which has remained stagnant for years even as inflation continues to rise. Mhatre raised additional concerns, asking why Dearness Allowance (DA) is not extended to EPS pensioners, whether the current pension is adequate to support a dignified life, and what steps the Centre is taking to address long-standing grievances.

Karandlaje said the government already provides significant budgetary support to ensure the minimum pension of Rs 1,000. “The Government of India is committed to ensuring maximum benefits for workers under the EPS-95 scheme, duly taking into consideration the health of the respective funds and future liabilities,” she said, without indicating any timeline for revisions.

The Employees’ Pension Scheme, introduced in 1995, is one of India’s largest social security frameworks for organised sector workers. It offers a wide range of benefits, including superannuation pension at 58 years, early pension from 50 years, disability pension, widow/widower pension, children’s pension, orphan pension, and lifelong pension for disabled dependents. Nominees and dependent parents are also eligible under specific circumstances.

Despite these provisions, pensioners have consistently argued that the current payout is insufficient to meet basic living expenses. Their long-standing demand is to revise both the minimum pension of Rs 1,000 and the maximum pension limit of Rs 7,500 in line with rising costs and wage growth.

With the minister’s latest statement underscoring the scheme’s financial constraints, any major revision to the EPS-95 pension slabs appears unlikely in the near future.

Higher pension benefits

EPFO has processed nearly 99% of all applications seeking higher pension benefits under the Employees’ Pension Scheme (EPS) 1995, the government informed Parliament on Monday. In a written reply to the Lok Sabha, Karandlaje said the retirement fund body had implemented the Supreme Court’s November 4, 2022 judgment on higher pension eligibility in a “time-bound manner.”

According to the minister, EPFO launched an online facility for pensioners and members to submit joint option forms, leading to 17.49 lakh applications being filed by July 11, 2023. Of these, employers forwarded around 15.24 lakh applications to the EPFO by January 31, 2025. As of November 24, 2025, EPFO has disposed of almost all applications it received.

Karandlaje informed the House that EPFO has issued 4,27,308 demand letters to eligible applicants. However, 34,060 cases were later deemed ineligible, largely because applicants failed to remit the required contribution amount. About 2,33,303 applicants have paid the demand amount or submitted consent; this includes 96,274 members still in service and 1,37,029 retirees.

Among the retired applicants, EPFO has already issued 1,24,457 revised Pension Payment Orders (PPOs), while 12,572 PPOs are in the final stages of approval.

The minister also clarified that pensions under EPS are calculated on a pro-rata basis, as laid out in Paragraph 12 of the scheme, ensuring parity between pensioners who retired under the wage ceiling and those who contributed on higher salaries. This formula, she noted, has been upheld by the Supreme Court.