The minimum pension being paid to eligible pensioners is ₹1,000 under the EPS-95 administered by the EPFO. It has remained low for several years, on account of inflation and a rise in the cost of living. The pensioners, unions, and even some advocacy groups have pressed for a considerable increase in this floor.
What Is Proposed And Why
It is reported that the minimum pension may be hiked to ₹2,500 per month from ₹1,000 before Diwali, this, however, has not yet been formally communicated by the EPFO. This proposal has, in fact, created a state of anticipation among pensioners for some relief ahead of the festival season. Implementation of this, in fact, would imply a 150% increase in the minimum pension. According to supporters, an increase is long overdue against rising inflation and soaring expenses for essentials, medicines, and day-to-day living.
Drivers Behind Demand
The following constitute sets of factors driving demands for a pension hike.
- There are many pensioners under the EPS who are receiving very low pensions-that are often below the cost of meeting minimum living needs.
- Trade unions and pensioner groups have formally pressed for raising the minimum pension, arguing that ₹1,000 is simply inadequate. Some have argued that ₹5,000 should be fixed as the minimum, linked perhaps to the dearness allowance so as to hedge against inflation.
- The government stages various forums (including parliamentary responses) wherein it has put forth that a review of the minimum pension under EPS-95 is underway and there is awareness of the pressure to raise the floor, but sustainability of funds has been cited as a concern.
What Pensioners Should Know & Check
Since no official notification confirming an increase in pension has yet been published, pensioners are advised:
- to watch over announcements from EPFO in its official website and press releases. and other news sources mention the proposal but consider it “possible or speculative” until confirmed.
- To ensure their pension documents and details (PPO Number, bank account, Aadhaar etc.) are fully up to date, for the increase may be implemented at any time and the disbursal could be delayed due to pending paperwork.
- Pensioners need to understand that the increased pension of ₹2,500 shall only apply to such pensioners already receiving minimum pension — but any arrears, if applicable, and the date from which the increase shall apply will depend on EPFO.
Difficulties & Sustainability
The increase, though welcomed, is therefore implored to face a few practical difficulties:
- Being a contributory pension scheme, EPS-95, increasing the minimum pension level, thus would put some pressure on the corpus and finances of the EPFO. Hence, any hike should consider the actuarial sustainability.
- If some hike clauses allow minimum pension to be enhanced with inflation or DA components, the financial commitment would further escalate.
- Then, the minutiae of implementation will determine how fast pensioners actually get their dues: who qualifies, from when, are arrears paid, etc.
Also Read: PF Withdrawal Made Easy: EPFO 3.0 To Launch With Digital Access Before Diwali