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EPS-95 Pension hike on hold: Chances of minimum pension of ?7,500 dim due to deficit in government funds
New Delhi, December 3, 2025: The central government has categorically rejected the demand to increase the minimum monthly pension in the Employees' Pension Scheme (EPS-95) from ?1,000 to ?7,500. Replying to a question in the Lok Sabha, Minister of State for Labour and Employment Shobha Karandlaje said that this decision is not possible at present due to the 'actuarial deficit' (estimated deficit) in the EPS fund. This announcement will come as a big blow to lakhs of retired employees, as a pension of ?1,000 is becoming inadequate due to inflation.
EPS-95 is an important scheme of the Employees' Provident Fund Organisation (EPFO), in which the employer contributes 8.33 percent of the basic salary of the employees. In addition, the central government contributes 1.16 percent, which is based on a salary limit of ?15,000. However, as per the 2019 fund assessment, there is a huge deficit in the fund, making it difficult to meet current and future pension liabilities. Minister of State Karandlaje said, "The government is committed to providing maximum benefits to workers under EPS-95, but major changes are not possible without improving the financial position of the fund. Currently, the minimum pension of ?1,000 is provided with additional funds from the government budget."
Pensioners' frustration and demands
For the past several months, EPS pensioners' organisations have been agitating for a minimum pension of ?7,500, dearness allowance and increase in the salary limit. In the Lok Sabha, MP Ballia Mama Suresh Gopinath Mathare raised these issues: "How will a pension of ?1,000 be sufficient in the face of inflation? Why is there no dearth of dearness allowance on pension? When will the government take action?" Their demands raise the question that even though the scheme is a 'defined contribution-defined benefit' scheme, why should the deficit in the fund be borne by the pensioners?
The government clarified in its reply that the amount deposited in the fund is the basis for pension distribution. The deficit has increased due to increasing numbers and insufficient income. It was also said that relief may be provided if the fund is improved or new provisions are made in the future. However, the possibility of an immediate increase was ruled out.
Deficit in the fund: Causes and consequences
'Actuarial deficit' means that the current returns of the fund cannot meet future liabilities. This deficit was revealed in the 2019 valuation. This is causing the EPFO ??to need additional funds, the burden of which may fall on the taxpayers. According to experts, if the salary limit is increased and the contribution ratio is improved, the fund can be strengthened.
Future prospects
The government said that it is continuously examining the EPS scheme. But there is no provision in this regard in the budget for the financial year 2025-26. Pensioner associations have now started thinking of moving the Supreme Court. This news is worrying for lakhs of families whose post-retirement security is at stake.
New Delhi, December 3, 2025: The central government has categorically rejected the demand to increase the minimum monthly pension in the Employees' Pension Scheme (EPS-95) from ?1,000 to ?7,500. Replying to a question in the Lok Sabha, Minister of State for Labour and Employment Shobha Karandlaje said that this decision is not possible at present due to the 'actuarial deficit' (estimated deficit) in the EPS fund. This announcement will come as a big blow to lakhs of retired employees, as a pension of ?1,000 is becoming inadequate due to inflation.
EPS-95 is an important scheme of the Employees' Provident Fund Organisation (EPFO), in which the employer contributes 8.33 percent of the basic salary of the employees. In addition, the central government contributes 1.16 percent, which is based on a salary limit of ?15,000. However, as per the 2019 fund assessment, there is a huge deficit in the fund, making it difficult to meet current and future pension liabilities. Minister of State Karandlaje said, "The government is committed to providing maximum benefits to workers under EPS-95, but major changes are not possible without improving the financial position of the fund. Currently, the minimum pension of ?1,000 is provided with additional funds from the government budget."
Pensioners' frustration and demands
For the past several months, EPS pensioners' organisations have been agitating for a minimum pension of ?7,500, dearness allowance and increase in the salary limit. In the Lok Sabha, MP Ballia Mama Suresh Gopinath Mathare raised these issues: "How will a pension of ?1,000 be sufficient in the face of inflation? Why is there no dearth of dearness allowance on pension? When will the government take action?" Their demands raise the question that even though the scheme is a 'defined contribution-defined benefit' scheme, why should the deficit in the fund be borne by the pensioners?
The government clarified in its reply that the amount deposited in the fund is the basis for pension distribution. The deficit has increased due to increasing numbers and insufficient income. It was also said that relief may be provided if the fund is improved or new provisions are made in the future. However, the possibility of an immediate increase was ruled out.
Deficit in the fund: Causes and consequences
'Actuarial deficit' means that the current returns of the fund cannot meet future liabilities. This deficit was revealed in the 2019 valuation. This is causing the EPFO ??to need additional funds, the burden of which may fall on the taxpayers. According to experts, if the salary limit is increased and the contribution ratio is improved, the fund can be strengthened.
Future prospects
The government said that it is continuously examining the EPS scheme. But there is no provision in this regard in the budget for the financial year 2025-26. Pensioner associations have now started thinking of moving the Supreme Court. This news is worrying for lakhs of families whose post-retirement security is at stake.
EPS-95 is an important scheme of the Employees' Provident Fund Organisation (EPFO), in which the employer contributes 8.33 percent of the basic salary of the employees. In addition, the central government contributes 1.16 percent, which is based on a salary limit of ?15,000. However, as per the 2019 fund assessment, there is a huge deficit in the fund, making it difficult to meet current and future pension liabilities. Minister of State Karandlaje said, "The government is committed to providing maximum benefits to workers under EPS-95, but major changes are not possible without improving the financial position of the fund. Currently, the minimum pension of ?1,000 is provided with additional funds from the government budget."
Pensioners' frustration and demands
For the past several months, EPS pensioners' organisations have been agitating for a minimum pension of ?7,500, dearness allowance and increase in the salary limit. In the Lok Sabha, MP Ballia Mama Suresh Gopinath Mathare raised these issues: "How will a pension of ?1,000 be sufficient in the face of inflation? Why is there no dearth of dearness allowance on pension? When will the government take action?" Their demands raise the question that even though the scheme is a 'defined contribution-defined benefit' scheme, why should the deficit in the fund be borne by the pensioners?
The government clarified in its reply that the amount deposited in the fund is the basis for pension distribution. The deficit has increased due to increasing numbers and insufficient income. It was also said that relief may be provided if the fund is improved or new provisions are made in the future. However, the possibility of an immediate increase was ruled out.
Deficit in the fund: Causes and consequences
'Actuarial deficit' means that the current returns of the fund cannot meet future liabilities. This deficit was revealed in the 2019 valuation. This is causing the EPFO ??to need additional funds, the burden of which may fall on the taxpayers. According to experts, if the salary limit is increased and the contribution ratio is improved, the fund can be strengthened.
Future prospects
The government said that it is continuously examining the EPS scheme. But there is no provision in this regard in the budget for the financial year 2025-26. Pensioner associations have now started thinking of moving the Supreme Court. This news is worrying for lakhs of families whose post-retirement security is at stake.
