As the Union Budget 2025 approaches, there is renewed discussion around increasing the minimum monthly pension under the Employees’ Pension Scheme (EPS-95). Pensioners’ associations and trade unions have been demanding a substantial hike, citing rising living costs and insufficient income support. However, despite widespread expectations, no official announcement or approval of a pension hike has been made yet.
The Employees’ Provident Fund Organisation (EPFO) and the Ministry of Labour have confirmed only one thing:
The minimum pension under EPS-95 remains Rs. 1,000 per month, the same rate that has been in force since 2014.
Key facts
- Existing EPS minimum pension: Rs. 1,000 per month
- Official revised pension amount: None announced yet
- Status: Government has received representations requesting an increase, but no approval or notification has been issued
- Funding structure of EPS-95:
- Employer contributes 8.33% of wages
- Government contributes 1.16% of wages (up to a salary cap of Rs. 15,000)
- Reason for demand: High inflation and inadequate pension income
- Official communication: PIB statement dated July 24, 2025 confirms minimum pension is still Rs. 1,000 and the fund has an actuarial deficit.
Current minimum pension under EPS-95
The minimum monthly pension under EPS-95 is Rs.1,000, which applies to eligible EPFO pensioners. Although several committees and employee organisations have recommended increasing the minimum pension, no approved notification has been issued confirming a revised amount.
Eligibility for eps pension
Employees contributing to EPF automatically contribute a part of their salary (8.33% of employer contribution) toward EPS. Members become eligible for pension after completing 10 years of service and reaching the age of 58. They may also opt for early pension after age 50 at a reduced rate.
How EPS pension is calculated
An EPS pension is calculated using a standard formula:
Monthly Pension = (Pensionable Salary × Pensionable Service) / 70
- Pensionable Salary: The five-year (60 month) average of basic pay and dearness allowance before retirement.
- Pensionable Service: The total number of years you have contributed to EPS.
Note: This method applies to employees retiring on or after 1 September 2014. Those who retired earlier had their pension calculated using the average salary of the last 12 months.
Pension & DA structure 2025 (Proposed – Not yet approved)
Public discussions, employee union submissions, and committee recommendations have suggested increasing the minimum pension and adding DA (Dearness Allowance) components. However, none of these proposals are approved, and no official notification has been issued.
Below is a safe placeholder summarising the current official figures and the unapproved proposed values (clearly marked):
Component |
Current official status |
Proposed (Not approved yet) |
Minimum monthly pension |
Rs. 1,000 per month |
Rs. 7,500 - Rs. 10,000 per month (proposal under discussion) |
Dearness Allowance (DA) |
No DA applicable currently |
DA addition proposed, rates not finalised |
Revised pension formula |
Existing EPS formula applies |
Reviewed formula proposed, not implemented |
Implementation year |
— |
Pending government approval |
Disclaimer: These proposed figures are widely discussed but not final and must not be treated as implemented benefits.
Why are pensioners demanding a hike?
1. Rising living costs
Everyday expenses for housing, food, transport, and healthcare have increased significantly. A pension of Rs. 1,000 per month provides very limited support, making financial survival difficult for most retirees.
2. Lifelong contributions
Employees contribute to EPF throughout their working life. Pensioners argue that the current pension amount does not reflect decades of service.
3. Need for dignified retirement
A higher pension would reduce reliance on family members and allow retirees to meet essential expenses independently.
Supreme court & stakeholder discussions
While the Supreme Court has issued important rulings on pension calculations and higher-pension eligibility, it has not mandated any specific increase in the minimum EPS pension.
Various trade unions have demanded a hike — many recommending a minimum monthly pension of Rs. 7,500 — but these are demands, not approved figures.
Also read: EPF Withdrawal Rules
Is the pension likely to increase soon?
Several committees and employee groups have urged the government to increase the minimum pension. Discussions are ongoing, but until an official notification is issued, the minimum pension stays at Rs. 1,000/month.
Benefits of EPS-95 pension
- Guaranteed monthly income after retirement
- Lifelong pension for the member
- Family pension for spouse and eligible children after the member’s death
- Minimum assured pension of Rs. 1,000 even if calculated amount is lower
Challenges in Increasing the minimum pension
1. Financial pressure
Increasing the minimum pension substantially would require higher government spending and may strain public finances.
2. Actuarial deficit
The latest valuation of the EPS fund shows a deficit, making immediate enhancements difficult without recalibrating contributions or government support.
3. Balancing national priorities
The government must weigh pension enhancement against other key spending areas such as healthcare, infrastructure, and welfare.
Also read: How to Calculate PF
What pensioners should do now
Until an official hike is announced, pensioners should:
- Ensure e-KYC, bank details, and Aadhaar are updated in EPFO records
- Submit Life Certificate on time
- Check pension credits via UMANG app or bank passbook
- Watch for official notifications from EPFO or the Labour Ministry
Is the EPS-95 pension expected to increase in 2026?
As of now, there is no confirmed increase announced for 2025 or 2026. Any future revision will depend on:
- Budget allocations
- EPFO’s financial status
- Approval by the Central Board of Trustees and the Labour Ministry
Pensioners should rely only on official notifications — not rumours or speculative figures.
Conclusion
While there is hope for a future pension hike and DA inclusion, the government has not yet confirmed any changes. The safest way to communicate this in content is to present current facts clearly while marking proposed revisions as pending approval — which is exactly how this article is structured.
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