Challenges and Growth of EPS ’95: Navigating Low Pensions Amidst Expanding Corpus


The Employees’ Pension Scheme (EPS) of 1995 has experienced significant growth in terms of the number of pensioners and the size of the pension corpus. However, a notable issue is the low amount of monthly pension received by the majority of its members. Key details of the scheme are as follows:

  1. Pension Distribution: Only 26,769 members received a monthly pension above Rs 5,000. In contrast, a vast majority, about 3.64 million members, received a monthly pension of up to Rs 1,000, which is the mandated minimum under the scheme.
  2. Average Pension: The average monthly pension for formal sector workers under EPS is Rs 1,506, which is considered meager.
  3. Funding and Contributions: The scheme is funded by 8.33% of monthly wages diverted from the employer’s share of Provident Fund contributions and a 1.16% contribution of monthly wages by the Central Government.
  4. Total Payouts: In the fiscal year 2022-23, the EPS paid out a total of Rs 21,796.85 crore to over 7.55 million pensioners. This included Rs 14,444.6 crore disbursed as pension and Rs 7,352.25 crore as withdrawal benefits.
  5. Corpus Growth: The accumulated corpus of the EPS has grown by almost 98% since 2017-18, reaching Rs 7.8 lakh crore by the end of the last fiscal year.
  6. Minimum Pension Proposal: There has been a proposal to increase the minimum pension to Rs 2,000 per month, as the current amount is deemed inadequate.
  7. Revamp Proposal: Discussions are ongoing to revamp the EPS, and the Employees’ Provident Fund Organisation (EPFO) is working to implement the Supreme Court ruling on higher pension​​.

These details highlight the growth and challenges within the EPS ’95, particularly the discrepancy between the growth in pensioners and corpus and the relatively low pension amounts received by most members.

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