Subscribers of the Employees' Pension Scheme (EPS-95) hoping for a significant increase in their monthly pension will likely be disappointed, as the government has indicated no immediate revision is on the cards. The reason cited is a concerning actuarial deficit in the pension fund, which limits its capacity to enhance payouts.
Parliamentary Disclosure Highlights Financial Strain
In a reply to the Lok Sabha on Monday, Minister of State for Labour and Employment, Shobha Karandlaje, confirmed the financial challenges facing the EPS-95. The disclosure came in response to an unstarred question from MP Balya Mama Suresh Gopinath Mhatre, who inquired if the government plans to raise the minimum EPS-95 pension from Rs 1,000 to Rs 7,500 per month.
Karandlaje stated that the actuarial valuation of the EPS fund as of 31 March 2019 revealed a deficit. This means the fund's current resources and projected income are insufficient to meet its long-term payment obligations, leaving little room for increasing benefits.
Why a Pension Increase is Financially Unviable
Explaining the scheme's structure, the minister noted that EPS-95 is a defined contribution-defined benefit scheme. Its corpus is built from two primary sources: a contribution by the employer at 8.33 per cent of wages, and a contribution from the Central Government through budgetary support at 1.16 per cent of wages, capped at wages of Rs 15,000 per month.
All pension benefits are paid solely from these accumulations. The minister emphasized that the government is already providing a minimum pension guarantee of Rs 1,000 per month through additional budgetary support, over and above its standard 1.16 per cent contribution to the Employees' Provident Fund Organisation (EPFO).
Karandlaje affirmed the government's commitment to worker welfare but clarified that any decision must consider the health of the fund and its future liabilities. The current deficit and ongoing funding pressures make an upward revision of the pension amount unlikely in the near term.
Long-Standing Grievances of EPS Pensioners
MP Mhatre's question also highlighted several persistent issues raised by EPS-95 pensioners. These include the absence of Dearness Allowance (DA) to counter inflation, the perceived inadequacy of the existing pension sum, and the need for the government to address representations from pensioners' organisations more effectively.
The minister's reply, while acknowledging the government's supportive role, underscored the continuous financial strain requiring central backing to sustain even the current minimum pension level.
What Benefits Does EPS-95 Currently Provide?
Despite the financial constraints, the EPS-95 scheme offers a range of social security benefits to members and their families, including:
- Pension on superannuation at 58 years
- Option for early pension from 50 years
- Disability pension for members disabled during service
- Widow or widower pension in case of the member's death
- Pension for up to two children until they turn 25
- Orphan pension if no spouse is alive
- Life-long pension for a disabled child or orphan
- Pension for a nominee or dependent parents in the absence of immediate family
- A withdrawal benefit for members not eligible for a monthly pension
While subscribers have long campaigned for higher minimum and maximum pension limits, the latest parliamentary response suggests their demands will remain unmet for the foreseeable future, anchored by the hard reality of the fund's actuarial health.
