EPS 95 Pension: Will It Rise From Rs 1,000 To Rs 7500? Here Is The Govt’s Reply

The Employee Pension Scheme or EPS-95 offers a minimum pension of Rs 1,000 to retired employees covered under the scheme. On the first day of Parliament's Winter Session, MP Balya Mama Suresh Gopinath Mhatre raised a question about the government's stance on increasing the minimum pension under EPS-95, expecting a clear answer. However, the written reply from Shobha Karandlaje, Minister of State for Labour and Employment, did not directly address the query but instead explained the current pension funding.

EPS-95 was launched on November 16, 1995, under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. It applies to all the employees covered under the EPF Act, 1956. This was introduced with the aim to provide employees with social security post retirement, or on disability and to their family members upon the employee’s death. Per the rules, the minimum pension under this is Rs 1,000. However, the EPS pensioners have been raising the demand to hike the amount to Rs 7,500 for a long time, arguing inflation as the primary reason.

Will Minimum Pension Under EPS-95 Rise?

On the Question of whether the government is considering increasing the minimum pension from 1,000 to 7,500 per month, and if not, the reasons, and whether the government has taken cognisance of the EPS-95 pensioners’ demands, the reply emphasised the defined contribution and defined benefits nature of the scheme.

“The EPS, 1995, is a ‘Defined Contribution-Defined Benefit’ Social Security Scheme. The corpus of the Employees’ Pension Fund is made up of (i) contributions by the employer @ 8.33 per cent of wages; and (ii) contributions from Central Government through budgetary support @ 1.16 per cent of wages up to an amount of Rs 15,000/- per month,” read the reply.

Note that under EPFO’s social security schemes, the employee and employer both contribute 12 per cent of the employee’s salary (basic and DA). While the employee’s 12 per cent contribution goes to the employee provident fund (EPF), the employer’s contribution goes to both EPF and EPS in the ratio of 8.33 per cent and 3.67 per cent, respectively. The EPS contribution is capped at Rs 15,000 even if an employee receives a higher salary. Here, the government also provides support (1.16 per cent of wages) by budgetary allocation to ensure a minimum pension.

But the government points to the actuarial deficit as a reason behind no likely increase in the minimum pension.

Actuarial Deficit

Karanlaje’s reply read, “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.”

Minimum Pension Of Rs 1,000 Is In Addition To The 1.16 Per Cent Budgetary Support

According to the reply, “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). 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 as well as the future liabilities thereon.”

While the organisations have been demanding a hike in the minimum pension to make it sufficient for pensioners to sustain on it, Karandlaje gave the same reply as given in the Rajya Sabha on July 24, 2025, indicating no such plan is under consideration. The minister also didn’t reply to the inclusion of dearness allowance (DA) under the scheme.

While the consumer price index (CPI) inflation remained at around 4.6 per cent in 2024-25, medical inflation is much higher. For pensioners, say the elderly, who need medical care more than others, the minimum pension stipulated under EPS-95 does not seem sufficient. Inflation is the reason the demand for increasing the minimum pension keeps coming up, with expectations for reforms like those in other schemes.