For a major relief to pensioners numbering in lakhs, the Employees’ Provident Fund Organisation is going to effect a hike in the minimum monthly pension in the year 2025. The Union Cabinet has accorded approval to raise the minimum pension under the EPS to ₹7,000 per month, apart from the Dearness Allowance. This move is largely expected to benefit a huge section of privately retired workers in particular, especially those under the EPS-95 scheme.
What Changes Are There In 2025?
The current minimum monthly EPS pension is ₹1,000, unchanged since 2014. After sustained pressure by pensioners’ associations and court interventions, the central government finally entered the fray to improve post-retirement income security.
As already at an advanced stage for being implemented, this proposal increases the minimum basic pension to ₹7,000 per month. In addition, Dearness Allowance will be calculated based on this amount and revised twice every year to protect pensioners from inflation. With DA calculated on this figure, the pension will come close to somewhere around ₹8,000-₹8,500 per month.
Beneficiaries?
This is likely to directly impact over 60 lakh EPS-95 pensioners upon implementation. Private-sector employees who retired after contributing to the EPF for at least 10 years are covered under the EPS scheme for the revised pension. This revision does a big step towards securing the financial status of retirees vis-à-vis surging cost of living implications.
How Will The Scheme Be Funded?
Up to some extent, the government will share the financial burden; the rest shall have to be borne by internal funds of the EPFO as per a restructured contribution formula. There are some discussions going on about slightly enhancing the employer contributions in order to fund the increase in benefits.
Timeline For Implementation
By July 2025, subject to the final approvals and procedural updates, the new pension rates should come into effect. Following which, the revised pension along with arrears, where applicable, will be w.e.f. that date disbursed to all eligible pensioners.
Conclusion
This hike in the pension by the EPFO is a major step towards fortifying the social security mechanism in India. As inflation erodes the meager savings of the pensioners, this revision in pension shall offer them timely relief and help in their financial sustenance. The beneficiaries must keep their eligibility documents updated and stay connected with the EPFO portals for the timely disbursal and further updates.
Also Read:EPFO Pension Scheme 2025 Explained: Get Pension For Life After 10 Years Of Work