The Employees’ Pension Scheme (EPS-95) is slated for an overhaul come 2025, with suggestions to increase minimum pensions to a level between ₹7,500 and ₹9,000 per month, affecting slightly above 78 lakh pensioners. Due to raising prices and continued demands, this increase is meant to accord retirees their financial dignity. In this article, you will be treated to the details on the proposed changes, eligibility, and steps pensioners must take.
Details Of Proposed Pension Increase
This scheme has been undergoing discussions since the EPFO proposed the huge increase in the minimum pension of the EPS-95 to the range of ₹7,500 to ₹9,000, from just ₹1,000, which has remained static since 2014. A Dearness Allowance (DA) will be introduced for the first time, linked to the All India Consumer Price Index (AICPI), which will serve to revise pension wherever necessary every six months as per inflation (estimated at 5.2% for 2024). This was endorsed by the Central Board of Trustees (CBT) during their meeting of July 2025, with the final approval expected by May 2026. The hike takes care of the problems post-retirement faced by pensioners with the ever-increasing cost of basic necessities like health care and food.
Government And Judicial Support
The Supreme Court, following the petition and intervention by the EPS-95 National Agitation Committee, directed in April 2025, that a minimum pension of ₹7,500 plus DA should be allowed to the pensioners by the EPFO. After meeting the representatives of pensioners in January 2025, Finance Minister Nirmala Sitharaman expressed a positive approach for the same. The Parliamentary Committee under the leadership of Basavaraj Bommai urged that an independent assessment should be made by the end of 2025 to ascertain its fiscal viability, the Government having the annual allocations of ₹750–1,000 crores to meet the current pension.
Eligibility, And Beneficiaries
The increase applies to:
- Retirees under EPS-95 with over 10 years of work in the organized sector.
- Widows/widowers/dependent children below 25
- Disability pensioners. More than 7.8 million pensioners, the low-income category of retirees in particular, can benefit. Those who have contributed higher amounts in the past may receive pensions of over ₹9,000. An Aadhaar-linked bank account remains essential for payments to continue being seamless, with no reapplication being required from present pensioners.
Financial And Implementation Challenges
The proposal envisages an annual hike of around ₹6,000-₹8,000 crore, putting a strain on the EPFO corpus of ₹10.5 lakh crore. Partial subsidy models are being considered to reduce costs. In line with the new CPPS (Centralised Pension Payment System) effective from January 2025, pension payments will be made from banks situated anywhere in the country, thus limiting the prospect of delay in payment. However, the EPS-95 fund being in an actuarial deficit challenges this, with the EPS-95 fund under review for ensuring long-term sustainability.
Also Read:7th Pay Commission: DA Arrears To Be Credited with October 2025 Salary