Good News This Week? EPFO May Hike EPS Minimum Pension After 11 Years; Rs 2,500 Or Rs 7,500 Pension Eyed!

EPS Minimum Pension Hike: Once again hopes are pinned as the Central Board of Trustees (CBT), which is the highest decision-making body of the Employees' Provident Fund Organisation (EPFO), is reportedly scheduled to meet later this week. Whether they are government employees, pensioners or retirees, they are expecting major reforms in their EPF account before Diwali. One such expectation is of a minimum pension hike from the current Rs 1,000 under the Employees Pension Scheme (EPS) 1995. If the government hikes the minimum pension, it will be first revision in 11 years under the EPS account.

EPFO Board Meeting October 2025: {image-
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The EPFO's high decision-making body is likely to meet between October 10th to October 11th in Bengaluru. Among major reforms, pensioners and trade unions are expecting the much-needed hike in EPS pension.

EPS Minimum Pension Hike: Rs 2500 Or Rs 7500

As per recent reports, EPFO may hike minimum pension to Rs 2,500 by this weekend, which will be an early Diwali gift. If this does happen, then minimum pension would rise by 1.5 fold or 150% from current pension of Rs 1,000.

However, earlier, various trade unions and employees had expressed their demand for minimum pension of Rs 7,500 from the current. But the chances of Rs 7,500 minimum pension is low as the burden on government's actuarial deficit will heightened. Nonetheless, if minimum pension does rise to Rs 7,500, then it will be a 7.5 times or 750% increase from current pension.

EPS-1995 Pension:

The EPS, 1995 is a "Defined Contribution-Defined Benefit" Social Security Scheme. The corpus of the Employees' Pension Fund is made up of (i) contribution by the employer @ 8.33 per cent of wages; and (ii) contribution from Central Government through budgetary support @ 1.16 per cent of wages up to an amount of Rs.15,000/- per month, as per government website.

In July month, Minister of State for Labour and Employment Sushri Shobha Karandlaje in written reply to a question in Rajya Sabha highlighted that 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 EPFO.

How To Calculate Pension Under EPS?

EPS Pension Formula:

Member's Monthly Salary = Pensionable salary X Pensionable service / 70

The pensionable salary is referred to as the average salary that an employee draws in the last 12 months before exiting the EPS scheme.

Meanwhile, the pensionable service is meant as the actual service period of the member. The EPS member will be required to get EPS certificate and submit to new employer every time they switch jobs.

EPS Pension Calculation:

Taking into consideration the formular, the maximum average salary (Basic Salary + DA) is considered to be Rs 15,000 under EPS. Meanwhile, keeping maximum pensionable service of 35 years in mind.

Here's how you will get maximum pension under EPS? So, upon applying the pension calculation formula, (15000 * 35 / 70) = the maximum pension comes around Rs 7,500 per month under EPS.

What Are The Benefits of Employee Pension Scheme?

As per Aditya Birla Capital's website, the following are the benefits of the EPS scheme to pensioners:

1. Receive pension on retirement: Once you complete 58 years of age, you become eligible to retire. If you have served the mandatory 10 years of service period in the company, then you can avail the pension after retirement.

2. Receive pension on leaving service before becoming eligible for monthly pension: If you have served the mandatory 10 years of service period, then you can withdraw the entire pension fund before completing 58 years of age.

3. Receive pension on total disablement within the service tenure: As a member of the EPFO, you receive a monthly pension in the event of permanent disability.

4. Pension for the family after you: In case of death, your family dependants will receive the monthly pension.

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