EPFO Pension: In today’s world of rising prices, many pensioners are finding post-retirement life increasingly challenging. Specifically, senior citizens who receive a mere Rs 1,000 monthly pension under the Employees’ Pension Scheme (EPS-95) have been persistently seeking assistance from the government. Recently, the topic of raising the minimum EPS pension to Rs 7,500 was once again brought up in Parliament, and the central government has provided its position on this matter.
In the Rajya Sabha, MP Dr. Medha Vishnu Kulkarni highlighted the struggles faced by EPS-95 pensioners. She pointed out that a pension of Rs 1,000 is inadequate in light of escalating inflation, healthcare costs, and everyday expenses. The MP inquired whether the government was contemplating an increase in the minimum pension to Rs 7,500, if it had received any requests from pensioners and unions in Maharashtra, and whether there was a timeline set for this.
Clear response from the Labor Minister
In response to this inquiry, Minister of State for Labor and Employment Shobha Karandlaje made it clear that there is no current proposal or timeline for raising the minimum EPS pension to Rs 7,500. She stressed the importance of considering the long-term financial stability of the pension fund before any pension increase is contemplated.
How does EPS-95 function?
The minister elaborated that EPS-95 operates as both a defined contribution and defined benefit scheme. This pension fund is sustained by employer contributions of 8.33 percent of salary, along with a contribution of 1.16 percent from the central government for salaries up to ₹15,000. All EPS pensioners receive their pensions from this fund.
The government provides budget support
The government currently ensures a minimum monthly pension of Rs 1,000 for EPS pensioners through the budget. This assistance is provided in addition to the regular central government contribution. The minister also stated that the pension fund undergoes an annual actuarial valuation to ensure a balance between future expenditures and contributions.
The government also clarified that there are no separate state-wise pension funds under EPS-95. Therefore, demands from Maharashtra or any other state are considered at the national level.
Discussion on EPFO reforms also
Along with pensions, major reforms related to the EPFO are also being discussed. There are reports that the government is considering raising the salary threshold for EPF and EPS from Rs 15,000 to Rs 25,000. If this happens, more employees could benefit from social security.