Move Aims to Benefit Millions of Retired Workers
The Employees Provident Fund Organisation (EPFO) is reportedly considering a significant revamp of the Employees Pension Scheme (EPS-95), which could substantially increase the minimum monthly pension for retired workers in India. Sources indicate that the current ₹1,000 minimum pension may rise to ₹5,000, providing much-needed relief amid rising inflation and living costs.
Background of EPS-95
Launched in 1995, EPS-95 provides financial assistance to employees in the organised sector after a minimum of ten years of service, with pension payments beginning at the age of 58 years.
However, the scheme’s flat-rate pension has long been criticized for creating financial insecurity among retirees. Many pensioners, particularly in major cities like Mumbai and Delhi, struggle to meet basic expenses such as healthcare, groceries, and housing, often relying on family support or taking up odd jobs to survive.
Response From Employee Groups
Employee unions and pensioner organizations have welcomed the proposed reforms, calling it a groundbreaking step toward strengthening social security.
A representative from a major trade union said, “This restructuring is long overdue. It may save lives and allow retired workers to live with dignity and less dependence.”
Next Steps and Government Approval
The pension increase depends on approval from the central government, with speculation that it could be included in the upcoming Union Budget.
If approved, the hike could not only alleviate immediate financial hardships but also set a precedent for future reforms, potentially linking pensions to inflation indexes to ensure retirees are not left behind as costs rise.
Challenges Ahead
While the reform promises relief, questions remain about funding sources, whether through higher employee contributions or government subsidies, and how the increase would be equally distributed across different workforce categories.
The proposal underscores the urgency of sound pension reforms to protect India’s aging labor force, ensuring that the country’s retirees can enjoy their golden years with financial security and dignity.