Government Considers Hiking EPS Pension to ₹7,500 for Private Sector Employees

Synopsis: 

The government is considering increasing the minimum monthly pension for Employees’ Pension Scheme (EPS) pensioners to Rs 7,500. This comes after persistent requests from EPS-95 pensioners who currently receive a meager pension of just Rs 1,000 per month.

Key Points:

• Current Situation: EPS-95 pensioners are receiving only Rs 1,000, which has become insufficient due to rising living costs.
• Proposed Hike: Pensioners are asking for the pension to be increased to Rs 7,500 per month.
• Additional Requests: They are also requesting other benefits, such as a dearness allowance (DA) hike and free medical care for pensioners and their spouses.

Pensioners’ Positive Demands and Requests

On January 10, 2025, pensioners had a productive meeting with Finance Minister Nirmala Sitharaman to discuss their requests as part of the pre-budget talks. The EPS-95 National Agitation Committee, representing pensioners, asked for a pension increase to Rs 7,500 per month to help retirees manage the rising cost of living.

Their proposal is aimed at improving the financial security of pensioners, ensuring they can comfortably handle daily expenses in their retirement years.

Encouraging Dialogue on Pension Hike

In the ongoing discussions, pensioner representatives, led by the EPS-95 National Agitation Committee, have put forward a well-thought-out proposal to raise the minimum pension to Rs 7,500. Meanwhile, trade unions have suggested a more modest increase, proposing Rs 5,000 per month, which still shows a commitment to supporting pensioners.

While the difference in views has sparked some debate, it is a healthy sign of a vibrant and constructive dialogue, focusing on what would best meet the financial needs of pensioners. These discussions reflect a collective effort to address the needs of the elderly workforce and improve their quality of life.

Addressing System Improvements Positively

The EPS-95 National Agitation Committee has also brought attention to areas where the current pension system can be improved. For example, while the government had announced a minimum pension of Rs 1,000 in 2014, there are still over 36.6 lakh pensioners who receive less than this amount. The committee sees this as an opportunity for the government to enhance the system to benefit more people and ensure that the pension amount reaches everyone who is entitled to it.

This constructive feedback highlights the committee’s desire to work alongside the government to make the pension system more effective and fair for all retirees, helping them enjoy a dignified life after retirement.

Understanding EPF Contributions

Under the Employees’ Provident Fund Organisation (EPFO):

• Both employees and employers contribute 12% of the employee’s basic salary to the retirement benefits fund.
• From the employer’s contribution, 8.33% is directed to the EPS, while the remaining 3.67% goes to the Employees’ Provident Fund (EPF).

Pensioners have called for a thorough review of this contribution allocation to ensure more substantial post-retirement benefits.

New Hope for Pensioners

Finance Minister Nirmala Sitharaman has assured pensioners that their requests will be carefully reviewed, bringing renewed hope to millions of retirees. If the proposed increase to Rs 7,500 is approved, it could greatly improve the financial security of India’s retired private-sector workers.

With the Union Budget 2025 on the horizon, pensioners are optimistic that this long-awaited change will finally become a reality.