EPFO Pension: Will private employees get ₹7,500 pension? The government responded in Parliament..

There was hope that the government would raise the meager pension amount under the Employees' Pension Scheme 1995 (EPS-95) to a respectable level. News was rife that the minimum pension could be increased from the current ₹1,000 to ₹7,500. Media reports even claimed that this could be approved at the Central Board of Trustees (CBT) meeting in October 2025. However, the government's response during the Winter Session of Parliament has put an end to all these speculations and expectations.

This issue arose in Parliament on December 1, 2025, when a written question directly asked the government, "Will the pension increase be? Let's understand in detail what the government said and what its direct impact will be on your pocket."

Will the pension increase from ₹1,000 to ₹7,500?
In the Lok Sabha, Member of Parliament Balaya Mama Suresh Gopinath Mhatre, raising the voice of pensioners, posed sharp questions to the government. He demanded clarification on six points. His most important question was whether the government was considering any plan to increase the minimum pension from ₹1,000 to ₹7,500. Furthermore, he asked why pensions are not being increased, why pensioners are not given dearness allowance (DA), and whether the government has attempted to understand how it is possible to survive on ₹1,000 in today's times.

The picture presented by Minister of State for Labor Shobha Karandlaje in response to these questions is disappointing for pensioners. The Minister clarified that no proposal to increase the minimum pension is currently under consideration. This means that the government has made it clear that there will be no major increase in pension amounts in the near future.

Understand the government's logic:
Government employees receive dearness allowance (DA) in line with inflation, but pensioners covered under EPS-95 do not. The government has explained the technical reasoning in Parliament.

According to the government, EPS-95 is a "Defined Contribution" scheme. Simply put, it is not a salary-linked scheme like government jobs. The pension amount is determined not by inflation, but by the amount deposited in the fund. The government argues that since DA is not part of the scheme's structure, pensioners cannot be given the benefit of inflation.

This is the biggest irony: the prices of milk, vegetables, and medicines rise equally for everyone, but the source of income increases only for government employees, leaving private pensioners stagnant.

Fiscal Deficit Cited
The government's primary reason for not increasing pensions is the financial condition of the EPS fund. The government cited the 2019 Actuarial Valuation report. According to this report, the pension fund is running in a deficit. This means that the fund has less money than it needs to pay future pensions.

The government argues that increasing the minimum pension amount without increasing the fund will have a devastating impact on the fund and could lead to the collapse of the entire system. Currently, the government is ensuring the payment of a minimum pension of ₹1,000 through budgetary support. Employers contribute 8.33% of an employee's salary, while the central government contributes 1.16% (up to a salary limit of ₹15,000). The government states that the current financial situation does not allow for further increases in the pension burden.

So, should we give up hope now?
EPS-95 is the country's largest pension system, covering over 8 million elderly people. Most of these are individuals who have spent their entire lives in private companies or low-paying jobs. In 2014, the minimum pension was set at ₹1,000. Ten years later, the amount remains the same, despite inflation having increased exponentially. Pensioners demand a pension between ₹7,500 and ₹9,000, along with medical benefits.

Experts believe the road is not completely closed, but it is not easy. Increasing pensions will require major changes to the current structure. This will require either increased contributions from companies (employers) or a substantial increase in government subsidies. Until this change in the funding model is made, the dream of a ₹7,500 pension will remain a dream.

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