EPFO Pension Alert! Will Govt Increase Minimum Pension Amount EPF Scheme? Check What FinMin Said

New Delhi: Employee unions have long advocated for increasing the minimum pension amount under the Employees' Pension Scheme (EPS), 1995, with representations from employees and other stakeholders.

Regarding an increase in the pension amount, Member of Parliament Asaduddin Owaisi raised questions in the Lok Sabha about any proposal to increase the minimum pension amount under EPS, 1995. He asked about any pensioner representations under EPS, 1995, requesting an increase in the minimum pension amount and seeking details of the proposed proposal.

Pankaj Chaudhary, Minister of State for Finance, stated that the Ministry of Labour and Employment has received representations from stakeholders, including trade unions, requesting an increase in the minimum pension amount under the EPS.

Owaisi inquired about the government's assessment of representations to increase EPS pensions, based on the observation by the Standing Committee on Labour, Textile and Skill Development's 30th report, and its findings.

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

The parliamentarian inquired about the government's intentions to allocate funds for an increase in pension under the EPS, 1995, and if so, the reasons behind this decision.

The Minister replied, “Government, for the first time, in the year 2014, provided a minimum pension of Rs 1000 per month to the pensioners under the EPS, 1995 by providing budgetary support, which was in addition to the budgetary support of 1.16 per cent of wages provided annually towards EPS to Employees’ Provident Fund Organization (EPFO).”

Minimum pension of Rs 1,000 under EPS95
The central government announced a minimum pension of Rs 1,000 per month for pensioners under EPS, 1995 in September 2014. However, the labour ministry proposed doubling the pension to Rs 2,000 per month under EPS-95, but it was not approved.