What is the Minimum Pension Contribution under EPS in 2025?

Started in 1995 by the Government of India, the Employee Pension Scheme (EPS) is aimed at helping the employees in the organised sector with their retirement. The scheme is managed by the Employee Provident Fund Organisation (EPFO) and is used to provide pension to the public as well as private sector employees once they attain the age of 60.

Under the Employee Provident Fund (EPF) scheme, the employee as well the employer is required to contribute 12% each of the basic salary of the employee plus Dearness Allowance (DA) towards an EPF account. A portion of this contribution goes towards the EPS scheme to create a pension fund for the employee. This fund is used to provide regular income to the employee after his/her retirement.

As per the EPS rules, it is mandatory for all employees who earn a basic salary plus DA of Rs. 15,000 or less to enrol themselves for the EPS scheme. As mentioned above, an employee is required to contribute 12% of his/her basic salary plus DA towards his/her EPF account. This contribution by the employee is split into two parts..While 3.77% of this contribution goes towards the EPF account, the remaining 3.77% in invested in the EPS scheme. Apart from this, the Government of India also contributes 1.16% of the employee’s basic salary into his/her EPS account. However, this facility is available for government employees only.Currently, the minimum monthly pension that an individual will receive after his/her retirement through the EPS scheme is Rs. 1,000. However, the Union is demanding the government to increase this limit to Rs. 5,000 per month since a long time.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.