EPFO Employees Urge Finance Minister for Increased Pension in Upcoming Budget

EPFO – As the Union Budget for 2025 approaches, expectations are high across various sectors, including farming, youth, and employment. With the government set to present its budget on February 1, 2025, organizations and associations have begun submitting their demands to Finance Minister Nirmala Sitharaman. Among these, employee unions have strongly advocated for an increase in the minimum pension under the Employees’ Pension Scheme (EPS), currently capped at Rs 1,000 per month.

The unions have proposed raising the minimum monthly pension to Rs 7,500, a demand they argue is long overdue since the initial announcement in 2014 to review the pension amount. According to reports, the central government may consider this request, which would benefit millions of private-sector employees currently receiving the meager amount. However, some trade unions have recommended a more modest increase to Rs 5,000 per month, citing the challenges faced by pensioners with the existing pension amount.

On January 10, 2025, a delegation of EPS-95 pensioners met with Finance Minister Sitharaman and outlined their demands, including the proposed increase in the pension to Rs 7,500, as well as a rise in the dearness allowance (DA) and provisions for free medical treatment for both pensioners and their spouses. During the meeting, the Finance Minister expressed a positive outlook and assured the delegation that their concerns would be addressed sympathetically.

Currently, more than 36.60 lakh pensioners continue to receive pensions lower than the promised minimum of Rs 1,000, even though the government had announced this threshold back in 2014. This disparity highlights the need for the government to review and adjust the pension scheme in order to provide financial stability to retirees, especially those in the private sector.

The Employees’ Provident Fund (EPF) scheme offers two types of accounts: one for lump sum withdrawals upon retirement and the other for monthly pension disbursements. Of the employer’s 12% contribution towards the EPF, 8.33% is allocated to the EPS for pensions, with the remaining 3.67% going to the EPF account. The government also contributes 1.16% to the EPS.

Trade unions, such as the Bharatiya Mazdoor Sangh, have emphasized the need for the minimum pension to be increased to Rs 5,000 per month, and they suggest adding the Variable Dearness Allowance (VDA) to this amount to adjust for inflation. However, pensioner organizations argue that even Rs 5,000 would not be sufficient to cover basic living expenses and have called for the pension to be raised to Rs 7,500 per month.

The call for a higher pension comes at a time when pensioners are struggling with the rising cost of living. The minimum pension of Rs 1,000, which was announced in 2014, has not been adjusted for inflation or changing economic conditions, leaving many pensioners in financial distress. The government’s consideration of this request could greatly improve the livelihoods of those dependent on their pensions.

EPFO’s Employment Pension Scheme

The debate over increasing the minimum pension under EPS-95 is gaining momentum, with both pensioners and employee organizations pushing for a meaningful revision. The upcoming budget presents an opportunity for the government to address these concerns and make a significant change to ensure that pensioners receive a fair and adequate amount to meet their basic needs. As discussions continue, the expectations of millions of employees and pensioners rest on the government’s ability to take decisive action.

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