EPFO Pension: There was hope that the government would raise the meager pension amount under the Employees’ Pension Scheme 1995 (EPS-95) to a respectable level. News was rife that the minimum pension could be raised from the current Rs 1,000 to Rs 7,500. Media reports even claimed that this could be approved at the Central Board of Trustees (CBT) meeting in October 2025. But now, the government’s response in the winter session of Parliament has put an end to all these speculations and hopes.
This issue arose in Parliament on December 1, 2025, when a written question directly asked the government, “Is the pension going to increase?” Let’s understand in detail what the government said and its direct impact on your pocket.
Will the pension increase from Rs 1,000 to Rs 7,500?
In the Lok Sabha, Member of Parliament Balaya Mama Suresh Gopinath Mhatre, raising the voice of pensioners, posed sharp questions to the government. He demanded clarification on six points. His most important question was whether the government was considering any plan to increase the minimum pension from Rs 1,000 to Rs 7,500. Furthermore, he asked why pensions are not being increased, why pensioners are not being given dearness allowance (DA), and whether the government has tried to understand how it is possible to survive on Rs 1,000 in today’s times.
In response to these questions, Minister of State for Labor Shobha Karandlaje presented a picture that is disappointing for pensioners . The Minister clarified that the government currently has no proposal to increase the minimum pension under consideration. In other words, the government has made it clear that there will be no major increase in pension amounts in the near future.
Government employees receive dearness allowance (DA) in line with inflation, but pensioners covered under EPS-95 do not. The government explained the technical reason for this in Parliament.
According to the government, EPS-95 is a “Defined Contribution” scheme. Simply put, it’s not a salary-linked scheme like government jobs. The pension amount isn’t determined by inflation, but rather by the amount of money deposited in the fund. The government argues that since DA isn’t part of the scheme’s structure, pensioners can’t be given the benefit of inflation.
This is the ultimate irony. The prices of milk, vegetables, and medicines rise equally for everyone, but the income streams only increase for government employees, leaving private pensioners stagnant. The government’s primary reason for not increasing pensions is the financial condition of the EPS fund. The government cited the 2019 Actuarial Valuation report. According to this report, the pension fund is running in deficit. This means that the fund has less money than it needs to pay future pensions.
The government argues that increasing the minimum pension amount without increasing the fund would severely impact the fund and could collapse the entire system. Currently, the government is ensuring the payment of a minimum pension of Rs 1,000 through budgetary support. The employer contributes 8.33% of the employee’s salary, and the central government contributes 1.16% (up to a salary limit of Rs 15,000). The government states that the current financial situation does not permit further increases in the pension burden.
