EPS-95 sustainability in focus as majority of pensioners get low monthly income

More than 47 lakh pensioners under the Employees’ Pension Scheme, 1995 (EPS-95) are currently receiving a monthly pension of less than ₹9,000 , the government informed Parliament on Monday, highlighting concerns over low retirement income for a large section of India’s organised workforce.

According to data from the Employees’ Provident Fund Organisation (EPFO), the total number of pensioners under EPS-95 stands at 82,11,182 . In a written reply to the Lok Sabha, Minister of State for Labour and Employment Shobha Karandlaje said that 47,04,270 active member pensioners fall in the sub-₹9,000 pension bracket.

The minister noted that the government has received representations from trade unions and public representatives seeking an increase in the minimum pension under the scheme, which is currently fixed at ₹1,000 per month .

The Employees’ Pension Scheme, 1995 is a government-backed social security pension scheme administered by the EPFO for workers in the organised private sector. It provides monthly pension benefits after retirement , as well as disability and family pensions in case of death of the member.

EPS-95 is a Defined Contribution-Defined Benefit scheme , meaning benefits are paid from a pooled fund built through regular contributions. The fund is financed by:

• 8.33 per cent of wages contributed by employers, and

• 1.16 per cent contribution from the Central Government, calculated on wages up to ₹15,000 per month.

All pension benefits under the scheme are paid out of this corpus.

The minister said the Centre provides budgetary support to ensure a minimum pension of ₹1,000 per month to EPS pensioners. This support is in addition to the government’s statutory 1.16 per cent contribution to the scheme.

She added that the pension fund is valued annually under provisions of the EPS, 1995 to assess its long-term financial health. The valuation process takes into account expected inflows from contributions and outflows in the form of pension payments to determine the scheme’s sustainability and future liabilities.

“The objective is to ensure the long-term viability of the fund while continuing to meet pension obligations,” Karandlaje said.

Reiterating the government’s commitment to social security, the minister said India continues to strengthen coverage under the EPF Scheme, 1952, EPS-95 and the Employees’ Deposit Linked Insurance (EDLI) Scheme , all administered by the EPFO.

However, with more than half of EPS pensioners earning below ₹9,000 a month and a minimum pension fixed at ₹1,000, the data has renewed debate over the adequacy of retirement income for millions of workers in the organised sector, even as the government weighs demands against the need to maintain the financial sustainability of the pension fund.