Think about a situation where you have spent decades serving an organization and finally, when you retire, you are only getting a meager pension for your survival. The monthly pension that is barely sufficient for the most basic needs like rent and rice. The scandalous situation that many of the Indian private sector employees, who are getting their pensions under the Employees’ Pension Scheme 1995 (EPS-95), will be over in 2025. The government is implementing a great plan of hiking the minimum payout from ₹1,000 to ₹7,500—a whopping 650% jump and this would mean that these old folks are no more in need of the king’s mercy living their remaining years in dignity and comfort.
What is EPS-95, And Why the Urgent Need For Change?
EPS-95, introduced back in November 1995 by the Employees’ Provident Fund Organisation (EPFO), guarantees a defined-benefit pension for employees in the private sector who work in factories or other establishments with more than 20 workers. It is funded by taking 8.33% of the employee’s basic salary (which is capped at ₹15,000). Hence, if the employee retires, he would be receiving monthly payments for the rest of his life funded by this Provident Fund.
Still, the minimum of ₹1,000 that was set back in 2014 has become worthless because of the inflation rate which is around 7-8% annually. Health care and grocery costs have gone up tremendously and many retirees have to live in poverty. Trade unions and agitation committees have been very vocal and active in their demand for an increase in the minimum pension to a level which honors the worker’s lifetime contribution.
Latest Buzz Hike Locked In For May 2025
May 2025 was the best month when EPFO came to unveil ₹7,500 as the minimum. This was announced while awaiting final Labour Ministry and Central Board of Trustees approval. This was just a result of heavy discussions and negotiations before the Budget 2025, that even the EPS-95 National Agitation Committee had a meeting with Finance Minister Nirmala Sitharaman on January 10 that was all about the speedy actions needed for the ministry.
On July 24, the Labour Ministry officially confirmed the discussions, recognizing the pressures from the unions as well as the discussion on the ₹7,500 proposal in light of a ₹50,000 crore EPS corpus deficit. A parliamentary committee in April recommended to complete the evaluation of the 30-year scheme by the end of the year for addressing the sustainability issue. If this come into effect in May as planned, then immediately over 3.66 million low-pension holders—out of 6 million total—who will be receiving arrears for delays.
Who Qualifies? Quick Eligibility Snapshot
Not all the beneficiaries will get the money at once. Here is an easy guide:
| Criterion | Details |
|---|---|
| Service Years | Contributions for a minimum of 10 years |
| Retirement Age | 58 years or superannuation, early retirement at 50 with reduced benefits |
| Salary Cap | Based on actual salary if opted for higher pension post-2014 Supreme Court ruling |
| Family Benefits | Spouses and children are entitled to 50% survivor pension |
Challenges Ahead
The issue of sustainability is still very dominant. The EPS fund is in trouble and the government already paid ₹2,000 crore a year—minimum pensions just received—through subsidies to cover it. Experts are issuing warnings that unrestrained hikes could eventually lead to strained budgets, however, proponents argue that small measures like voluntary higher contributions from the members will fill the gaps without impacting the youth’s burden.
Also Read: PM Jan Dhan Yojana 2025: Government Expands Financial Inclusion With New Benefits