We can picture a man who worked for a whole life and when he retired he got a small pension that just paid for a week’s groceries. This was the case for millions of Indian private-sector workers under the EPS-95 scheme until the year 2025 came along and a sharp increase in pension reversed their fate.
What Fuels The EPS-95 Engine?
The Employees’ Pension Scheme, which started in 1995, works by allocating 8.33% of an employee’s basic pay (with a maximum limit of ₹15,000) to a retirement fund. It guarantees a steady income after 58 years of age, at the same time rewarding an employee for 10 years of service or more. The law of nature was inflation and continued to eat away at the scheme, leaving only the ₹1,000 minimum payment that dates back to 2014 in place. Then all of a sudden came 2025 and the “protests” and “parliamentary” reforms and changes on the horizon.
Protests Ignite The Fire For Change
The pensioners of the EPS-95 Act were a constant presence on the streets of Delhi and were never out of the news. In October 2025 thousands of people surrounded the EPFO office demanding a minimum pension of ₹7,500 and restoration of DA. Besides, the EPS-95 National Agitation Committee also represented the unions and made the case for Finance Minister Nirmala Sitharaman, urging the government to take measures against the rapidly increasing costs—healthcare up 15%, food 10% every year. Their message reached Parliament, where a standing committee demanded a quick evaluation by the end of this year. This support, which mixed the energy of the street with pressure from the government, managed to open the treasury.
Government’s Bold Stroke The ₹7,500 Milestone
The minimum pension was increased to ₹7,500, plus Dearness Allowance to alleviate the effects of inflation, in October 2025—this was a very important victory. The administration made it clear that there would be no need for new applications; the EPFO would simply adjust the payments automatically through banks linked to Aadhaar. This price increase was already in place, so more than 6 million pensioners were affected and the basic amount of ₹7,500 would be transferred into their accounts by November. Labour Minister Mansukh Mandaviya called it “equity endorsed by the Cabinet” which compensates for a decade of erosion. As for the arrears? Expect phased credits for prior shortfalls, which will help ease immediate woes.
Who Steps Into The Spotlight?
The requirements remain unchanged: 10+ years under EPFO, age 58+. Family pensioners—spouses and children—share 50-75% of the total. But the real winners? The low-income retirees, whose old ₹1,000 is now multiplied seven times. The high-earners, however, are capped at the ₹15,000 formula and will see proportional lifts.
| Aspect | Before Hike (2024) | After Hike (2025) |
|---|---|---|
| Minimum Pension | ₹1,000/month | ₹7,500/month |
| Inflation Shield | None | DA-linked |
| Beneficiaries | ~3.66 million | ~6 million+ |
| Service Req. | 10 years | Unchanged |
| Payout Mode | Bank-linked | Auto Aadhaar |
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