Government Plans to Triple Minimum Pension for EPF Members to ₹3,000 Per Month

In a major relief for millions of retired employees across the country, the central government is reportedly working on a proposal to increase the minimum monthly pension under the Employees' Pension Scheme (EPS). The move could see the existing minimum pension of ₹1,000 per month being raised to ₹3,000 per month, a threefold hike aimed at ensuring financial security for pensioners in their post-retirement life.

What is EPS and Who Manages It?

The Employees' Pension Scheme (EPS) is a retirement benefit scheme managed by the Employees’ Provident Fund Organisation (EPFO), a statutory body under the Ministry of Labour and Employment. EPS is primarily funded by a portion of the employer’s contribution made under the Employees’ Provident Fund (EPF) scheme.

Here's how the current EPF contribution works:

• Employers contribute 12% of the employee’s basic salary and dearness allowance.

• Out of this, 8.33% is diverted towards EPS, and the remaining 3.67% goes into the EPF account.

The EPS ensures a regular monthly income for employees after retirement. However, over the years, many pensioners have voiced concerns that the current minimum pension of ₹1,000 per month is insufficient to meet basic living expenses, especially in urban areas.

Demand for Higher Pension Gains Momentum

Ahead of the Union Budget 2025, a delegation of EPS pensioners met with Finance Minister Nirmala Sitharaman, urging the government to revise the minimum pension amount to at least ₹7,500 per month. Despite a compelling case presented by the pensioners, no formal assurance was provided by the government at the time.

Nevertheless, sources within the Labour Ministry have confirmed that the government is seriously evaluating a proposal to increase the minimum pension to ₹3,000 per month. This would be a significant first step toward addressing long-standing demands from pensioners' associations.

Cost Implications Under Review

According to officials familiar with the matter, the Labour Ministry is currently analyzing the financial implications of increasing the pension. The assessment includes estimating the additional burden on government finances and ensuring that the fund remains sustainable in the long run.

The move is expected to benefit millions of retired employees who are currently dependent on a meager pension. Many of them served in the private sector in low-income jobs and have limited or no other source of income in retirement.

Why a Pension Hike is Crucial

With inflation and cost of living on the rise, especially in healthcare and housing, the existing pension amount is barely enough to cover basic needs. Experts have long argued that a revision of the minimum pension is necessary to maintain the dignity of life for senior citizens.

A revised pension plan would also:

• Improve social security for elderly citizens.

• Provide relief to families with limited financial means.

• Boost consumer spending among senior citizens.

What Happens Next?

While no official notification has been released yet, insiders suggest that the proposal could be included in the upcoming budget announcements or rolled out as a welfare initiative. If approved, the revised pension scheme will not only impact current pensioners but also improve retirement planning prospects for millions of working professionals enrolled under EPFO.

Conclusion

The government’s plan to triple the minimum EPS pension to ₹3,000 is a welcome move that could bring substantial relief to India’s retired workforce. Although the final decision is still under review, the direction signals a positive shift toward strengthening retirement benefits and securing the future of pensioners across the country.