Even as the number of pensioners under the Employees’ Pension Scheme (EPS) rose 3.8% year-on-year to 7.85 million in FY24, pensioners availing of a monthly amount of over Rs 5,000 saw almost a negligible increase on year, according Employees’ Provident Fund Organisation (EPFO) data seen by FE.
Of the total 7.85 million pensioners, only 0.4% of the people earned a pension of more than Rs 5,000 every month in the last fiscal year. To be precise, in FY24, the number of such pensioners were 29,608, and in FY23, they were 26,769.
On the other hand, the number of persons earning a pension between Rs 3,001-Rs 4,000 per month saw a
rise of 17.5% on year to 0.47 million in FY24, while those earning between Rs 2,001- Rs 3,000 a month recorded a 5.1% increase to 1.45 million.
Additionally, the number of pensioners earning below Rs 1,000 per month, saw an increase of 0.8% on year to 3.67 million from 3.64 million in FY24. Those who earn less Rs 1,000 every month, account for 47% of the total pensioners.
The data holds significance as the EFPO’s Central Board of Trustees (CBT) is deliberating on raising the minimum pension threshold, which is currently set at Rs 1,000 per month. In September 2014, a minimum pension of Rs 1,000 per month for pensioners covered under the EPS, was announced by the central government.
In 2023, the labour ministry had sent a proposal to the finance ministry, seeking to double the pension to Rs 2,000 per month under the EPS-95. But the proposal was not approved. SP Tiwari, National General secretary, Trade Union Coordination Centre (TUCC) & Member, CBT-EPFO, said: “The government should consider linking the minimum pension to Consumer Price Index – Industrial Workers (CPI-IW) index. In the past 10 years, CPI-IW has risen by 1.7 times, the minimum pension can be increased proportionately.”
Rohitaashv Sinha, partner, King Stubb & Kasiva, said: “Increasing monthly pension is the need of the hour. However, the same should be done balancing the fund in mind. An option that can be exercised in increasing the employer’s contribution to the fund.”
FE had reported earlier that the labour ministry is considering introducing comprehensive changes in the EPFO rules, to give the subscribers more flexibility in making contributions to the EPF. As per the current rules, the entire contribution of the subscriber, that’s 12% of their “basic salary”, goes to the EPFO. The matching employer’s contribution, on the other hand, is bifurcated– 3.67% goes to the EPF, while 8.33% goes to the Employees’ Pension Scheme (EPS). The government is mulling to remove the 12% threshold for employees, and allow them to contribute more, if they feel so, as per sources.
Jayashree Swaminathan, partner, HSA Advocates, said: “The minimum pension of ₹1,000 under the EPFO is inadequate to meet even the most basic needs such as food, shelter, healthcare, and utilities. An immediate increase in the minimum pension is a necessity and a critical step towards ensuring social security for our senior citizens.”