The demand was raised forcefully in a recent pre-budget meeting with the Finance Ministry’s top brass. The unions are pushing for fundamental changes, arguing that the existing system is unsustainable for retirees.
The Key Demands
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Minimum Pension Hike: Raising the EPS-95 minimum pension from ₹1,000 to ₹9,000 per month.
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DA Linkage: Crucially, they want the new minimum pension to be linked with Dearness Allowance (DA). This would ensure the pension keeps pace with inflation, something the current fixed ₹1,000 minimum completely fails to do.
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OPS Restoration: They demanded the elimination of the New Pension Scheme (NPS) and the restoration of the benefits of the Old Pension Scheme (OPS), arguing the current Unified Pension Scheme is inadequate.
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Tax Relief: They also sought tax incentives on social security contributions and an increase in the income tax rebate ceiling for salaried individuals.
The Financial Context
The EPS-95 is a defined contribution-defined benefit scheme.
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Employer Contribution: 8.33% of the employee’s wages go to the pension fund.
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Government Contribution: 1.16% of wages (up to a ceiling of ₹15,000 per month) is provided by the Central Government via budgetary support.
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Budgetary Support: The government already provides additional budgetary support just to ensure the ₹1,000 minimum pension can be paid out. The jump to ₹9,000 would require a massive increase in this annual government allocation, which is the major hurdle.
The demand for the hike has been ongoing for years, with various pensioner groups previously asking for amounts like ₹7,500. Now, ₹9,000 is the number on the table, and the government will have to address this massive actuarial deficit problem in the budget, or face sustained public pressure. The thing is, this is now a political issue of providing dignified living to crores of retirees.
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