EPFO Minimum Pension Hike: The EPS, 1995, is a "Defined Contribution-Defined Benefit" Social Security Scheme. The corpus of the Employees' Pension Fund is made up of contributions by the employer at 8.33 per cent of wages, and contributions from the Central Government through budgetary support at 1.16 per cent of wages, up to an amount of Rs 15,000 per month.

All benefits under the scheme are paid out of such accumulations.

Currently, the Government is providing a minimum pension of Rs 1000 per month to the pensioners under the EPS, 1995, by providing budgetary support, which is in addition to the budgetary support of 1.16 per cent of wages provided annually towards EPS to the Employees' Provident Fund Organisation (EPFO).

EPFO Minimum Pension Hike

Private sector employees under the Employees' Provident Fund Organisation (EPFO) have long been demanding an increase in their minimum pension, which has remained Rs 1,000 per month since 2014. EPF members contribute 12 per cent of their basic salary towards the provident fund, with employers matching this contribution. Of the employer's share, 8.33 per cent is allocated to the Employees' Pension Scheme (EPS), while 3.67 per cent goes towards the EPF scheme.

Ahead of Budget 2025, a delegation of EPS-95 retirees met Finance Minister Nirmala Sitharaman to press for their long-standing demand of a minimum pension of Rs 7,500 per month plus dearness allowance (DA). The EPS-95 National Agitation Committee stated that the finance minister assured them that their demands would be considered with sympathy.

EPFO Minimum Pension Hike: If EPS pension rises to Rs 7500, how much monthly pension will you get after 10, 20, 25 years of service?

How is EPS contribution made?

For retirement savings, both employee and employer contribute to EPFO. Each contributes 12 per cent of the employee's basic salary plus dearness allowance (DA).

The employer's 12 per cent contribution is divided into two parts:

• 8.33 per cent is contributed to the Employees' Pension Scheme (EPS)
• 3.67 per cent is contributed to the Employees' Provident Fund (EPF)

However, EPS contribution is subject to a wage ceiling, which is generally capped at Rs 15,000 per month for most employees.

Read more: Rs 200 daily SIP vs Rs 6000 monthly SIP: Which could generate a higher corpus? See calculations

Who is eligible for Employee Pension Scheme (EPS)?

• You must be a member of the EPFO and have contributed to EPS.
• You must have completed at least 10 years of eligible service to receive pension benefits.
• Normal pension is available at the age of 58 years.
• Early (reduced) pension can be taken from the age of 50 years, subject to certain conditions (with a reduced amount).

EPFO Minimum Pension

The minimum monthly pension under EPS is Rs 1,000 (as per current government rules). However, ahead of Budget 2025, a delegation of EPS-95 retirees met Finance Minister Nirmala Sitharaman to press for their long-standing demand of a minimum pension of Rs 7,500 per month plus dearness allowance (DA).