India Notifies Employees' Pension Scheme, 2026, Replacing Older Schemes
Quick Look
- India has introduced the Employees' Pension Scheme (EPS), 2026, replacing the EPS, 1971, and EPS, 1995.
- The minimum pension limit remains Rs 1,000, and the calculation formula is unchanged, based on pensionable salary and service.
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Why It Matters
The Employees' Pension Scheme, 2026, has been notified, replacing older schemes like EPS, 1971, and EPS, 1995. The core provisions, including the pension calculation formula and minimum pension limit, remain unchanged.
The government has notified the Employees' Pension Scheme (EPS), 2026, under the Code on Social Security, 2020, replacing the EPS, 1971, and EPS, 1995 schemes. While the new scheme introduces some changes, many of its core provisions remain the same.
Following the notification of the new scheme, many EPS subscribers are wondering whether the government has also increased the minimum monthly EPS pension limit of Rs 1,000.
Has the government increased the minimum EPS pension limit of Rs 1,000?
The government has not increased the minimum monthly EPS pension under the Employees' Pension Scheme (EPS), 2026. The scheme continues to provide a minimum pension of Rs 1,000 per month, the same amount that has been in force since September 1, 2014.
Has the formula to calculate EPS pension changed?
No, EPS pension will be calculated as per the previous formula.
The EPS pension formula is-
Monthly Pension = (Pensionable salary × pensionable service) ÷ 70
Pensionable salary will continue to be the average monthly salary drawn during the last 60 months before exiting the pension fund.
Who can become a member of the EPS, 2026, scheme?
The new EPS scheme applies to:
Employees who become members of the EPF Scheme, 2026, and whose wages are within the notified wage ceiling.
Existing members of the earlier EPS, 1995, or Employees' Family Pension Scheme, 1971.
A member remains covered under the scheme until reaching the age of superannuation, withdrawing benefits, receiving pension, or in the event of death.
How much is contributed to the pension fund?
The contribution pattern remains largely unchanged under the EPS Scheme, 2026, with employer's contribution at 8.33% of wages up to is diverted to the pension fund and the central government's contribution at 1.16% of pay, subject to the wage ceiling notified by the government.
For eligible members who exercised the higher pension joint option under the earlier EPS, 1995, the employer's contribution on wages above Rs 15,000 continues as provided under the scheme.
Employees' Pension Scheme, 2026, replaces earlier EPS pension schemes
Employees' Pension Scheme, 2026, replaces Employees' Pension Scheme, 1995, and Employees' Family Pension Scheme, 1971. However, the government has clarified that pensions already sanctioned under the earlier schemes will continue without interruption. Existing pensioners will continue to receive their benefits.
Will you get an EPS pension if you leave your job before completing 10 years of service?
Members with less than 10 years of eligible service will continue to have two options:
Receive a withdrawal benefit, or obtain a scheme certificate so that the service can be added if they join another EPF-covered establishment later.
Key changes in EPS-2026 scheme from EPS-1995 scheme
Pension claims to be settled within 20 days
12% interest for delayed claims
Higher pension provisions incorporated into the scheme
Digital compliance for employers
The scheme’s name is changed to Employees' Pension Scheme, 2026, from Employees' Pension Scheme, 1995.
Open Questions
- Will there be future changes to the minimum pension limit?
- What are the specific implications for employers regarding digital compliance?
