The Employees’ Provident Fund Organisation (EPFO) reforms to the Employees’ Pension Scheme (EPS) are underway as of April 2025 and strive to enhance financial stability for millions of pensioners across India.
Proposal for Increase in Minimum Pension
Efforts to increase the minimum amount remain a distant hope, with EPS’ present minimum pension camped on ₹1,000 per month since 2014. The parliamentary standing committee thinks this figure should be generously enhanced, given the new realities of cost-of-living hikes and inflation. It has been reported that an increase to ₹7,500 per month, a hike of 650%, has been under active consideration by the government. The final call on this matter ought to come after the wide-ranging assessment of the EPS has been completed.
Revamping The EPS Totally
The EPS is undergoing a third-party evaluation for reformation purposes of the first time since 1995 to measure its viability and effectiveness. The Labour Ministry has commissioned this evaluation, which will be completed by the end of 2025. On the basis of that, the recommendations will be made for reform in pension amounts and pension conditions, among others.
Centralized Pension Payment System (CPPS)
As of January 1, 2025, to enable the more efficient disbursement of pensions, the EPFO has put into effect the Centralized Pension Payment System. This system allows pension payments to be made directly into the bank accounts of beneficiaries throughout India in a speedy and delay-free manner.
Pensioner and Trade Union Demands
Associations of pensioners and trade unions have raised the issue of changing the minimum amount long ago. They argue that the amount of ₹1,000/month is woefully inadequate to satisfy the basic requirements of living. Other demands include linking the minimum pension amount with DA based on inflationary trends. Again, these demands are being looked into by the government in the ongoing review of the EPS.
Legal Developments
In a recent edict, the Kerala High Court stated that if an employee had contributed higher pension on “full salary” at the time of service, there cannot be refusal to any higher pension by delayed or bulk payments thereafter. This verdict might have some bearing on the consideration of what the status of pension would be hereafter.
Thus, the atmosphere is shifting rapidly in favour of the pensioners. The stakeholders are advised to keep their ears to the ground for any further announcements or policy modifications pertaining to this matter very soon.
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