Just before this Diwali, intense discussions are likely to take place on increasing the minimum pension under the EPFO’s Employees’ Pension Scheme (EPS-95) from ₹1,000 to ₹2,500 per month. This historic decision is expected to be taken at the Central Board of Trustees (CBT) meeting to be held in Bengaluru on October 10-11, 2025. If this proposal is passed, millions of pensioners across the country will receive a major financial boost before the festive season.
Why is a change in EPS pension necessary after 11 years
The minimum pension amount under EPS-95 was fixed at ₹1,000 in 2014 and has remained unchanged for the past 11 years. Given inflation and rising living costs, employee unions and pensioner organizations have been strongly demanding an increase. Although some organizations are demanding an increase to ₹7,500, reports suggest that the CBT meeting may decide to increase it to ₹2,500, which would be a major relief for millions.
Pensioners Receiving Low Pensions
Recently, Minister of State for Labor and Employment Shobha Karandlaje shared some data in Parliament. As of March 31, 2025, a total of 81,48,490 pensioners were registered under the EPS-95 scheme. However, only 53,541 of these individuals receive a pension of ₹6,000 or more per month. This means that only 0.65 percent of total pensioners can benefit from the higher pension. Simply put, most pensioners still receive a very low amount.
How is your EPS pension calculated
There is a set formula for calculating EPS pension, which determines your monthly pension:
Pension calculation formula
Pension = (Pensionable Salary × Pensionable Service) ÷ 70
Pensionable Salary: This is the sum of the average Basic Salary and Dearness Allowance (DA) for the last 60 months, with a maximum limit of ₹15,000.
Pensionable Service: This is the total number of years of service (if service is 6 months or more, it is counted as the next full year).
Example:
If an employee has served for 35 years and falls under the salary limit of ₹15,000, they can receive a pension of up to ₹7,500 per month. A minimum of 10 years of service is required to qualify for the EPS pension, and this pension begins at age 58.
EPFO 3.0
The agenda for the CBT meeting includes a proposal for ‘EPFO 3.0’. Its primary goal is to make the entire EPFO process completely digital and paperless. This modern initiative could facilitate withdrawals through ATMs and UPI. Additionally, claims settlement and reconciliation will be possible in real-time. The death claims process will be simplified, and data integration will be automated. Major companies like Infosys, Wipro, and TCS are working on this powerful project, and it is expected to be launched next year.
