EPFO : A big improvement is coming for EPFO (Employees Provident Fund Organisation) members in India. According to recent reports, the government is considering increasing the minimum pension under EPS (Employees Pension Scheme) from Rs 1,000 to Rs 7,500. This represents a 650% increase. This change could improve the lives of lakhs of pensioners.
What is EPS (Employees Pension Scheme)?
EPS is a social security scheme launched by EPFO in 1995. Through which employees of the organized sector can get a regular pension after retirement.
How does contribution in EPS work?
- Employers have to contribute 8.33% of the employee’s salary every month to the EPS account.
- The central government contributes 1.16% of the money as subsidy to the EPS fund.
- Currently, the minimum pension is Rs 1,000 and the maximum is Rs 7,000 (depending on length of service and salary).
650% hike in EPS pension: What will change?
As per the government proposal:
Minimum pension: Rs 1,000 → Rs 7,500
Maximum pension: Rs 7,000 → Consideration for higher amount.
Why this change?
Expensive growth: Cost of living has increased significantly from 2014 to 2024.
Pressure from trade unions: EPS pension has not been revised for the last 10 years.
Parliamentary committee recommendation: The labour ministry has suggested that the EPS revision should be completed by 2025.
Eligibility for EPS pension: Who can get it?
Retirement pension:
- Those who retire at the age of 58.
- Must have at least 10 years of EPS contribution.
Early Pension:
- If retired at the age of 50 (but at a lower amount).
- Minimum service of 10 years is required.
Disability/Widow Pension:
- In case of permanent disability.
- To spouse or children after the death of the member.
How is EPS Pension calculated?
EPS Pension is calculated by this formula:
Monthly Pension = (Pensionable Salary × Pensionable Service) ÷ 70
Pensionable Salary:
This is the average salary for the last 60 months before retirement (as per Supreme Court verdict).
Pensionable Service:
- If more than 6 months of service, it is considered as 1 year.
- If more than 20 years of service, +2 years bonus.
Benefits of EPS Pension
- ✅ Stable income after retirement.
- ✅ Security for family members (Widow/Orphan Pension).
- ✅ Financial support in cases of disability.
- ✅ Scheduled support from the government.
A potential 650% hike in EPS pension could be a big help for pensioners. This change is expected to be implemented by 2025. If you are an EPFO member, check your EPS account regularly and wait for updates!
