The government, which is doing pension for government employees, has now started big preparations for private sector employees. It is believed that the pension of private sector employees can also be increased by three times. Pension for a private sector is overseeing the Employees Provident Fund Organization (EPFO), in which the employee’s salary is contributed every month and a part of it goes to the Employees Pension Scheme (EPS), which is found as a pension on retirement.
Employees Provident Fund Organization
A senior official associated with the case said that the central government is currently preparing to increase the minimum pension from Rs 1,000 to Rs 3,000 per month under the Employees Pension Scheme (EPS). This increase in minimum pension can be effective in the next few months. EPS is a retirement plan run by the Employees Provident Fund Organization (EPFO) in India. It provides pension to the employees of the organized sector after retirement. The EPS is funded from one part of the employer’s contribution.
How much contribution to EPS
Currently, 8.33% of the 12% contribution of employers to the Employees Provident Fund (EPF) goes to the Employees Pension Scheme (EPS), while the remaining 3.67% goes to EPF. At the same time, the total amount of 12 per cent of the employee cut from the salary of the employee is deposited in the EPF. The official says that we are considering the possibility of making the minimum pension amount to Rs 3,000 per month. It is pending for a long time. In the year 2020, the Ministry of Labor sent a proposal to the Ministry of Finance to increase the minimum pension of Rs 2,000 per month under the EPS, for which a separate budget was needed but it could not get the approval.
7.5 thousand rupees is in demand
During the 2025 budget interaction, a delegation of EPS retired employees met Finance Minister Nirmala Sitharaman. He demanded to increase the minimum EPS pension to Rs 7,500 per month, but he did not get any assurance. The total fund of EPS is more than Rs 8 lakh crore and the total number of pensioners under this scheme is about 78.5 lakhs. Out of these, more than 36.6 lakh people receive the minimum pension of Rs 1,000 per month.
How much is spent on pension right now
The Ministry of Labor has currently said to work on giving pension of Rs 3,000. In the financial year 2023-24, the Ministry spent Rs 1,223 crore to provide minimum pension to pensioners under EPS, which is 26% more than Rs 970 crore spent in the financial year 2022-23. It is obvious that due to the increase in pension amount by 3 times, the cost of allocation on the government can also increase more than 3 times. Retail inflation rate in the last 11 years is 72 percent.