April 30, 2025 - The Central Government is considering increasing the minimum pension under the Employees' Pension Scheme (EPS) from Rs 1,000 to Rs 3,000. According to a government source, the government is preparing to raise the minimum pension to Rs 3,000 per month, a move that has been pending for a long time.

The increase in the minimum pension amount is likely to be effective in the next few months, the source added.

Earlier, in 2020, the Ministry of Labour had proposed increasing the minimum pension to Rs 2,000 and sent the proposal to the Finance Ministry, but it was not approved. In discussions before the 2025 Budget, a delegation of retired employees had asked for raising the minimum pension to Rs 7,500. The delegation had presented this request to Finance Minister Nirmala Sitharaman.

The total fund corpus of the EPS exceeds Rs 8 lakh crore, with 78.5 lakh pensioners enrolled under the scheme. Of these, 36.6 lakh people are currently receiving the minimum pension of just Rs 1,000 per month.

“The Labour Ministry is currently analysing the additional expenses for giving a higher pension (Rs 3,000),” informed the source.

In FY24, the Ministry had spent Rs 1,223 crore in providing minimum pension under the EPS, which is 26% higher than Rs 970 crore spent in FY23.

What is EPS?

The EPS is a retirement plan which offers a consistent income after retirement to employees in the organised sector. This ensures the employees a stead income post retirement. The EPS is managed by the Employees' Provident Fund Organisation (EPFO) and is funded by a portion of the employer's contribution to the Employees' Provident Fund (EPF).

Of the employer's 12% contribution to EPF, a portion of 8.33% goes to EPS while the remaining 3.67% goes to the EPF.

With Media Inputs