Many employee unions and representative bodies have been asking the government to increase the minimum pension under the Employees’ Pension Scheme (EPS) from the existing Rs 1000 per month to Rs 7,500. However, when the government was asked about this, it did not announce any decision to raise the minimum pension.
In response to a query in Lok Sabha this week, the Ministry of Labour and Employment said representations have been received from various stakeholders including trade unions and public representatives to increase the minimum pension under EPS 1995 from the existing Rs 1,000 per month. However, the government did not announce any decision to increase the pension amount.
Will there be any increase in minimum pension under EPS?
Shiv Sena (UBT) MP Bhausaheb Rajaram Wakchaure raised the issue of a pension hike in Parliament and asked about the government’s stand on the demand made by the EPS-95 National Agitation Committee for a hike in the minimum pension to Rs 7,500 per month along with dearness allowance. The MP also asked whether the government considers the existing pension of around Rs 1,000-2,000 per month inadequate for a decent life.
In response, Minister of State for Labour and Employment Shobha Karandlaje said that the government is committed to providing robust social security coverage to EPFO members. The minister said that any decision has to balance social security needs with the long-term sustainability of the pension fund. However, the government did not make any specific announcement about increasing the EPS pension.
What has government said about increase in pension?
Karandlaje said representations have been received from various stakeholders to increase the minimum pension from the existing Rs 1,000 per month.
The government explained that the EPS, 1995 is a defined contribution-defined benefit social security scheme where pension benefits depend on contributions made to the pension fund and the financial health of the fund.
The ministry said the corpus of the Employees’ Pension Fund is made up of:
(i) Contribution by the employer at 8.33 percent of wages.
(ii) Contribution from the central government through budgetary support at 1.16 percent of wages up to an amount of Rs 15,000 per month.
It was informed that 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.
Karandlaje said that the government is providing a minimum pension of Rs 1,000 per month to pensioners under the EPS, 1995, through budgetary support which is in addition to the budgetary support of 1.16 percent of wages provided annually towards the EPS to the Employees’ Provident Fund Organisation.
Sustainability of fund key concern
The ministry said that the government is committed to ensuring robust social security coverage to members of EPFO schemes while taking into consideration the sustainability of the Fund and the future liabilities thereon.
