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April 18, 2025

Parliamentary Committee Calls for First Independent Review of EPS and Pushes for Higher Minimum Pension

K
Kalpana Sharma— Current Affairs Editor & Content Lead

Key Highlights

  • The Employees’ Pension Scheme (EPS) will undergo its inaugural independent assessment, slated for completion by the close of 2025.
  • The parliamentary panel, led by BJP MP Basavaraj Bommai, urges an immediate uplift of the statutory minimum pension of ₹1,000.
  • The Ministry of Labour and Employment has initiated the evaluation through a competitive Request for Proposal (RFP) process.
  • EPS, administered by the Employees’ Provident Fund Organisation (EPFO), has never been scrutinised since its inception in November 1995.

Detailed Insights

The Standing Committee on Labour, chaired by Basavaraj Bommai, highlighted a glaring oversight: for nearly three decades the EPS, which provides retirement benefits to organized‑sector workers, has operated without any external audit. To rectify this, the Ministry issued an RFP, inviting qualified firms to conduct a third‑party review. The committee stipulated that the study be finalized by December 2025, enabling policymakers to act on its recommendations promptly.

Concurrently, the committee stressed that the current minimum pension of ₹1,000 is grossly insufficient in light of the steep rise in consumer prices since 1995. It called on the government to revise this floor amount without delay, arguing that a higher baseline is essential for the scheme’s credibility and for safeguarding retirees’ purchasing power.

Administration of the EPS remains under the EPFO, which manages contributions from both employers and employees and disburses pension benefits upon retirement. The forthcoming evaluation is expected to examine fund sustainability, benefit adequacy, and governance mechanisms.

Key Concepts

  • Third‑Party Evaluation: An independent audit conducted by an external agency to assess a program’s performance, financial health, and compliance.
  • Minimum Pension: The lowest monthly pension amount guaranteed by the EPS, currently set at ₹1,000.
  • Request for Proposal (RFP): A formal procurement method wherein the government solicits bids from qualified firms to deliver a specified service.
  • Employees’ Provident Fund Organisation (EPFO): The statutory body responsible for managing the Employees’ Provident Fund and the EPS.

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