Why EPS-95 Minimum Pension Hike to ₹7,500 Is Still Delayed: Government Explains

Pensioners under the Employees’ Pension Scheme (EPS-95) have been demanding an increase in the minimum monthly pension from the current ₹1,000 to ₹7,500. Along with this, they are also seeking dearness allowance (DA), family pension benefits, and free medical facilities. The demand has been pending for several years, with pensioners repeatedly highlighting that the existing pension amount is inadequate to meet basic living expenses, especially amid rising inflation and healthcare costs.

According to details raised in Parliament, around 78 lakh EPS pensioners across India are affected, many of whom depend entirely on this pension for their livelihood after retirement.

Current EPS Minimum Pension Status

The minimum pension under EPS-95 is currently fixed at ₹1,000 per month. This amount was last revised in 2014, when the central government stepped in with budgetary support to ensure that no eligible pensioner received less than this minimum amount. Since then, there has been no upward revision, and the pension amount is not linked to inflation or adjusted through DA, despite a steady increase in the cost of living.

How the EPS Pension Fund Works

The government explained that EPS-95 is a defined contribution–defined benefit social security scheme. The pension fund is built through two main sources: an employer contribution of 8.33% of wages and a central government contribution of 1.16% of wages, calculated on salaries up to ₹15,000 per month. All pension payments are made from this accumulated fund.

The Labour Ministry clarified that, apart from these regular contributions, the government already provides extra financial support to maintain the ₹1,000 minimum pension.

Actuarial Deficit: The Main Reason for Delay

One of the key reasons cited for delaying the pension hike is the actuarial deficit in the Employees’ Pension Fund. The fund is evaluated every year, and as per the actuarial valuation conducted as of March 31, 2019, the scheme is running a deficit. This means the expected future liabilities of the fund exceed its projected assets.

Due to this financial imbalance, the government said that a steep increase in the minimum pension or linking EPS pensions to inflation would place additional pressure on the fund and may affect its long-term sustainability.

Why DA-Linked Pension Was Rejected

The Labour Ministry referred to the findings of a High Empowered Monitoring Committee (HEMC), which examined the feasibility of providing DA or linking EPS pensions to the cost-of-living index. The committee concluded that such measures are not financially viable under the current structure of the pension fund, given its actuarial position.

Status of Supreme Court Directions on Higher Pension

Parliament was also informed about the progress in implementing Supreme Court judgments related to pension calculation based on higher wages. The government said EPFO has taken several steps to comply with the November 2022 Supreme Court order, including providing an online facility for submitting joint options.

By July 11, 2023, around 17.49 lakh applications were received, and by January 31, 2025, employers had forwarded about 15.24 lakh applications to EPFO. As of November 24, 2025, nearly 99% of these applications have been processed.

Read More:PFRDA Expands Investment Scope: Pension Funds Can Now Invest in Gold and Silver ETFs! 

No Clear Timeline for Pension Hike

Despite acknowledging pensioners’ concerns and outlining the financial challenges, the government did not provide any timeline for raising the minimum EPS pension to ₹7,500 or for introducing DA and medical benefits. The official response reiterates existing constraints but stops short of announcing any policy decision.

Conclusion

The government maintains that the delay in increasing the EPS-95 minimum pension is primarily due to the actuarial deficit and financial limitations of the pension fund. While progress has been made in implementing Supreme Court orders on higher pensions, the long-standing demand for a higher minimum pension remains unresolved, leaving millions of pensioners waiting for meaningful relief.

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