The Ministry of Labour and Employment notified the Employees’ Pension Scheme, 2026, under the Code on Social Security, 2020, on 29 June 2026. The scheme supersedes the Employees’ Pension Scheme, 1995, and the Employees’ Family Pension Scheme, 1971, while protecting existing memberships, pension entitlements and accrued service.

EPS 2026 does not completely redesign India’s employee pension system. Instead, it transfers the existing pension framework to the Code on Social Security, formalises digital compliance requirements and incorporates certain developments relating to higher pension contributions and withdrawal benefits.

For employers, HR teams, payroll professionals and employees, understanding what has changed and what has remained unchanged is essential for accurate contributions, record maintenance and pension claims. 
 

EPS 2026 at a Glance

Feature	EPS 2026
Notification date	29 June 2026
Legal framework	Code on Social Security, 2020
Supersedes	EPS 1995 & Employees’ Family Pension Scheme, 1971
Standard employer contribution	8.33% of wages, subject to the notified wage ceiling
Central Government contribution	1.16% of wages, subject to the notified wage ceiling
Higher-pension cases	Employer contribution of 9.49%, subject to eligibility and applicable conditions
Pension Minimum eligible service for monthly pension	Generally 10 years
Minimum member pension	₹1,000 per month, subject to the scheme’s conditions
Pension formula	Pensionable Wages × Pensionable Service ÷ 70
Complete claim-settlement timeline	20 days
Interest for unjustified delay	12% per annum

 

The minimum monthly pension continues at ₹1,000, although deductions may apply in cases such as early pension or where earlier commutation or return-of-capital benefits were taken.
 

What is the Employees’ Pension Scheme (EPS) 2026?

The Employees’ Pension Scheme 2026 provides pension benefits to eligible members covered under the statutory provident fund framework. 

Depending on eligibility and circumstances, the scheme provides for:

• Superannuation pension
• Early pension
• Permanent and total disablement pension
• Widow or widower pension
• Children’s pension
• Orphan pension
• Nominee pension
• Pension for dependent parents
• Withdrawal benefits or a scheme certificate where the member has insufficient eligible service for monthly pension

 
Existing members of EPS 1995 continue under EPS 2026, and pensions already sanctioned under the earlier scheme remain protected. The transition does not require existing members or pensioners to re-enroll merely because the governing scheme has changed.

 

What Has Remained Unchanged Under EPS 2026?

1. Standard Pension Contribution

The employer continues to contribute 8.33% of the member’s wages to the Pension Fund, subject to the notified wage ceiling. The Central Government continues to contribute 1.16%, subject to the applicable ceiling.

Employees do not make a separate direct EPS contribution. The pension contribution is diverted from the employer’s overall statutory provident fund contribution.
 

2. Minimum Service Requirement

A member generally requires at least 10 years of eligible service to qualify for a monthly member pension.

A member who leaves employment before completing 10 years may, subject to the scheme conditions, choose between a withdrawal benefit and a scheme certificate. A scheme certificate allows the member to preserve the completed service and combine it with eligible service from future employment.
 

3. Pension Calculation Formula

The monthly pension continues to be calculated using the following formula:

Monthly Pension = Pensionable Wages × Pensionable Service ÷ 70

Pensionable wages are generally calculated using the average monthly wages during the 60-month contributory period immediately preceding the member’s exit from the scheme. The applicable wage ceiling for each relevant period must also be considered.

A member who superannuates upon attaining the prescribed superannuation age and has completed at least 20 years of pensionable service continues to receive an additional two years of service weightage. This weightage is subject to both conditions being fulfilled and should not be described as automatically available to every member completing 20 years.

 

4. Claim-Settlement Timeline

A pension claim that is complete in all respects and supported by the required documents must be settled within 20 days of receipt.

Where the Commissioner fails to settle a complete claim within this period without sufficient cause, interest at 12% per annum may be charged on the benefit amount. The amount may be recovered from the salary of the responsible Commissioner.

This provision is important, but it is a continuation of the earlier EPS 1995 requirement rather than an entirely new reform.
 

5. Protection Against Employer Default

A member or beneficiary cannot be denied pensionary benefits merely because the employer failed to comply with its contribution obligations.

However, the employer remains liable for the default and may face recovery proceedings and other consequences under the applicable legal framework.

 

What Are the Important Developments Under EPS 2026?

1. Higher-Pension Contribution Is Expressly Recognised

For eligible members who exercised the joint option for pension contributions on wages above the statutory ceiling under the earlier scheme, the employer is required to contribute 9.49% of wages under the applicable conditions.

This comprises the standard 8.33% pension contribution together with the additional 1.16% component that is now required to be borne by the employer in eligible higher-pension cases.

Employers should therefore identify employees covered by valid higher-pension options and ensure that their payroll and contribution systems apply the correct rate.
 

2. Withdrawal Benefits Are Subject to a Waiting Period

A member who exits employment before becoming eligible for monthly pension may choose a withdrawal benefit or a scheme certificate.

However, where the member exits before attaining the age of superannuation, the withdrawal benefit can generally be claimed only after 36 months from the date on which the last contribution became due, or upon attaining the age of superannuation, whichever occurs earlier.

Employees who expect to return to covered employment should carefully evaluate whether retaining their service through a scheme certificate may be more beneficial than withdrawing the amount.
 

3. Digital Compliance Has Been Formalised

EPS 2026 places greater emphasis on digitally available and verifiable employment records.

Employers are required to:

• Submit the prescribed consolidated employee return
• Maintain accurate employee, wage and contribution records
• Make relevant registers and books of account electronically available during inspections
• Maintain records relating to employment, muster rolls and wages
• Provide establishment and ownership details
• Comply with directions issued by the Central Board

Electronic returns were already part of the earlier EPS framework. The significant development under EPS 2026 is the broader formalisation of electronic record availability, authentication and inspection access under the Code on Social Security.
 

4. Family Pension Protections Continue

EPS 2026 continues to provide pension protection to eligible family members after the death of a member.

Depending on the member’s family circumstances, benefits may be available to a surviving spouse, eligible children, orphans, a valid nominee or dependent parents.

A permanently and totally disabled child may continue to receive children’s pension or orphan pension beyond the normal age limit, subject to the scheme conditions. These protections should be presented as continuing benefits rather than entirely new categories introduced in 2026.

 

What Should Employers Do Now?

Employers should review their pension compliance processes rather than assuming that the transition will happen entirely at the administrative level.

Key actions include:

• Identify all employees who are eligible EPS members
• Review the wage components used for contribution calculations
• Verify whether any employees are covered by a valid higher-pension joint option
• Apply the appropriate 8.33% or 9.49% employer contribution
• Reconcile payroll records with EPFO contribution data
• Maintain accurate digital wage, service, exit and family details
• Report employee exits and changes promptly
• Check whether pension contributions for contract workers have been correctly deposited
• Preserve supporting documentation for electronic inspections
• Assist employees and beneficiaries with complete pension claims

Employers should also avoid treating EPS 2026 as an isolated payroll update. Pension compliance should be reviewed together with the Employees’ Provident Funds Scheme 2026 and the broader requirements of the Code on Social Security.
 

What Should Employees Check?

Employees should verify that:

• Their Universal Account Number and personal details are correct
• Their date of joining and date of exit have been updated
• Pension contributions appear correctly in their EPFO records
• Previous eligible service has been transferred or preserved
• Family and nomination details are updated
• Higher-pension option records, where applicable, are available
• A scheme certificate is preserved when service is retained instead of withdrawn

Employees approaching retirement should begin checking their records well before submitting their pension claim. Differences in names, dates, wages, service periods or family information can delay processing even though the scheme prescribes a 20-day timeline for complete claims.

 

Conclusion

The Employees’ Pension Scheme 2026 represents a legislative and administrative transition rather than a complete replacement of the existing pension-benefit structure.

The contribution framework, pension formula, minimum-service requirement, family benefits, protection against employer defaults and claim-settlement timeline largely continue from EPS 1995. The more important developments include the express treatment of higher-pension contributions, the 36-month condition for withdrawal benefits and the broader formalisation of digital records and compliance.

Employers should use the transition as an opportunity to review wage calculations, pension membership, higher-pension cases, employee records and payroll-to-EPFO reconciliations.

Need help reviewing your organisation’s EPF and EPS compliance?

comply360° can support your organisation with payroll compliance reviews, contribution reconciliations, statutory advisory and employer compliance assessments.

Email us at business@comply360.in or call +91 90823 34420.
 

Frequently Asked Questions

What is the Employees’ Pension Scheme 2026?

EPS 2026 is the statutory employee pension scheme notified under the Code on Social Security, 2020. It supersedes EPS 1995 and the Employees’ Family Pension Scheme, 1971, while protecting existing members, pensioners and accrued benefits.
 

Has the standard employer contribution changed?

The standard employer contribution continues at 8.33% of wages, subject to the notified wage ceiling. A 9.49% employer contribution applies in eligible higher-pension cases, subject to the prescribed conditions.
 

Is the Central Government still contributing to EPS?

Yes. The Central Government continues to contribute 1.16% of wages, subject to the notified wage ceiling.
 

Can pension be denied if an employer fails to deposit contributions?

No. Pensionary benefits cannot be denied solely because the employer failed to comply with its contribution obligations. The employer, however, remains liable for the default.
 

How long should a complete pension claim take?

A claim that is complete in all respects should be settled within 20 days of receipt. Interest at 12% per annum may apply where an unjustified delay is attributable to the Commissioner.
 

Can an employee withdraw the EPS benefit immediately after leaving a job?

Not necessarily. Where the member leaves before superannuation and is not eligible for monthly pension, the withdrawal benefit is generally available after 36 months from the date the last contribution became due, or upon attaining superannuation age, whichever is earlier. The member may also consider obtaining a scheme certificate.
 

Has EPS 1995 been abolished?

EPS 1995 has been superseded by EPS 2026. However, existing memberships, sanctioned pensions, accrued service and protected pension rights continue under the new framework.