Labor unions have once again intensified their demand for increasing the minimum pension under EPS-95 to Rs 9,000 per month. But is such a huge increase possible from the current Rs 1,000? The issue has resurfaced in Parliament and the Supreme Court, bringing the focus back on pension calculations under the Employees’ Pension Scheme (EPS) 1995 run by the Employees’ Provident Fund Organization (EPFO). Let us also tell you what kind of demand is being made by the union. Also what is this complete calculation?
Demand for minimum pension of Rs 9,000
Recently, in a question in the Lok Sabha, MP Dr. Kirsan Namdev asked whether various labor unions, including the Bharatiya Mazdoor Sangh (BMS), had urged the government to increase the minimum EPS pension to Rs 9,000. Responding to the House, Minister of State for Labor and Employment Shobha Karandlaje confirmed that representations have been received from trade unions and public representatives demanding an increase from the existing Rs 1,000 per month. However, the government did not give any timeline for the increase.
The Minister emphasized that EPS-95 is a “Defined Contribution-Defined Benefit” scheme. The corpus of a pension fund is made up of:
– 8.33 percent employer contribution of salary
– 1.16 percent contribution from central government on salary up to Rs 15,000
He also informed that the government is providing a minimum pension of Rs 1,000 per month through budgetary support in addition to 1.16 per cent contribution.
The important thing is that currently 47,04,270 active pensioners are receiving pension of less than Rs 9,000 per month. This number explains why the demand for pension revision remains so politically and socially important.
Why does an increase of up to Rs 9,000 seem difficult?
A direct increase from Rs 1,000 to Rs 9,000 would mean a nine-fold increase. Since the EPS is funded by a fixed contribution percentage and is evaluated every year for long-term sustainability, such a large increase would significantly increase the expenditure on the pension fund. The Government has repeatedly reiterated that before taking any decision, special attention is given to the stability of the fund and future liabilities. This is where the importance of salary limit comes to the fore.
SC gave this instruction
In early 2026, the Supreme Court directed the Central Government to review the EPFO salary limit of Rs 15,000 within four months and possibly increase it. The current salary range is effective from September 1, 2014, when it was increased from Rs 6,500 to Rs 15,000. Earlier, the salary limit of Rs 6,500 was effective from June 1, 2001.
This direction of the court has rekindled the hope that the revision of salary limit may automatically increase the pension amount – because pension is directly linked to pensionable salary.
What will be the changes if salary limit is 25 thousand?
According to reports, the government may consider increasing the EPFO salary limit from Rs 25,000 to Rs 30,000 after the implementation of new labor laws focused on strengthening social security. If this happens then what will be the monthly pension under EPS:95. Let us try to understand this with an example…
Under EPS-95, the calculation of monthly pension is decided by a formula.
(Pensionable Salary × Pensionable Service) / 70
Pensionable Salary: Average of basic salary and dearness allowance of last 60 months
Minimum service period: 10 years
Maximum pensionable service period: 35 years
Minimum Pension (10 years of service)
Rs 25,000 × 10 / 70 = Rs 3,570 per month
Maximum pension (35 years of service)
Rs 25,000 × 35 / 70 = Rs 12,500 per month
This shows that even if the salary limit is increased to Rs 25,000, the minimum pension for a person with only 10 years of service will be around Rs 3,570, and not Rs 9,000. Instead of expecting a lump sum increase of Rs 9,000, a more practical outcome could be a modest increase along with an increase in the salary limit. If the limit is revised to Rs 25,000 or Rs 30,000, the pension under the existing formula will automatically increase. The exact amount will depend on years of service. The government, in its reply in Parliament, has reiterated its commitment towards “strong social security coverage” under the EPF, EPS-95 and EDLI schemes, keeping in mind the sustainability of the fund.