EPS subscribers with Rs 1,000 pension increases by 3% to 3.66 mn in FY24

The annual report data also shows that the central government provided a support of Rs 957 crore during FY 24 for the minimum pension

The total number of pensioners receiving minimum assured pension of Rs 1,000 under the Employee Pension Scheme (EPS) has increased by 3 per cent to 3.66 million in the financial year 2023-2024 (FY24) compared to the previous year, according to the data from the Employees’ Provident Fund Organisation's (EPFO) latest annual report reviewed by Business Standard. 

 

The data also shows that the central government provided a support of Rs 957 crore during FY24 for the minimum pension.

 

Of the total number of pensioners, those who received government support to avail the minimum Rs 1,000 monthly pension under EPS increased marginally to 2.06 million in FY24 from 2.05 million in FY23, according to the EPFO data.

 

Overall, the total number of pensioners under the EPS rose by nearly 4 per cent to 7.85 million in FY24.

 

In September 2014, the government had given effect to a long-awaited demand of workers' unions for the implementation of a minimum pension under EPFO, thus providing a minimum pension of Rs 1,000 per month for members, Rs 750 per month for orphan pensioners, and Rs 250 per month for children pensioners. Any shortfall in this amount is borne by the government. EPS applies to EPFO subscribers with basic monthly pay of upto Rs 15,000.

 

Experts argue that such a high incidence of beneficiaries receiving government support to avail the minimum monthly pension is due to the stagnation in wages of workers and high inflation, leading to lower contributions from subscribers, thus necessitating government contributions. 

 

KR Shyam Sundar, adjunct professor, Management Development Institute, says that a large number of subscribers under the EPS are lowly paid workers, thus severely limiting their contributions towards their pension during their working age, making them dependent more on social capital rather than pension.

 

“EPS is a contributory scheme and the pension thus received is proportional. However, the stagnation in wages and an increase in inflation during a worker's lifetime means that contributions are less, thus leaving a worker with very little corpus and little pension afterwards, which then has to be supplemented by the government funds,” he said.

 

Citing living costs, worker unions have been advocating for long for an increase in the minimum monthly pension. A delegation of the EPS-95 National Agitation Committee had met with senior officials of the EPFO earlier this year to press for a minimum monthly pension of Rs 7,500. Similarly,  Chennai EPF Pensioners’ Welfare Association had written to Union Labour Minister Mansukh Mandaviya to increase the minimum monthly pension to Rs 9,000.

 

“With inflation inching up and the minimum pension being fixed almost a decade back, it is pertinent that the government revises the minimum pension upwards, as is being demanded by various quarters. This will not only help the health of elderly pensioners, it will also boost the consumption expenditure in the economy,” added Sundar.

 

The annual report showed that while 3.5 million subscribers received a pension between Rs 1,001 and Rs 3,000, nearly 600,000 received a pension between Rs 3001 and Rs 5000 and barely 29,608 received a pension of more than Rs 5,000.