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On 29th June 2026, the Ministry of Labour & Employment notified the Employees’ Pension Scheme (EPS), 2026 under the Code on Social Security, 2020, replacing the Employees’ Pension Scheme, 1995 (EPS-95) and the Employees’ Family Pension Scheme, 1971. This notification marks a significant milestone in India’s social security reform journey, bringing the pension framework under a unified legal umbrella while retaining the core benefits that millions of pensioners and contributing members have relied upon for decades.
The new scheme is part of a broader modernization effort alongside the EPF Scheme, 2026 and the EDLI Scheme, 2026, all aligned with the Code on Social Security, 2020. Existing members, accumulated balances, and pensions already sanctioned under the earlier schemes will continue without interruption, and existing pensioners will continue to receive their benefits.
Here is a detailed comparison of what has changed, what remains the same, and what it means for employers and employees.
Comparison at a Glance: EPS 1995 vs EPS 2026
| Particulars | EPS 1995 | EPS 2026 |
| Legal Framework | Under EPF & MP Act, 1952 | Under Code on Social Security, 2020 |
| Effective Date | 16 November 1995 | 29 June 2026 |
| Earlier Schemes | Replaced Family Pension Scheme, 1971 | Replaces EPS-1995 & Family Pension Scheme, 1971 |
| Coverage | EPF members within wage ceiling | Same coverage under Social Security Code |
| Employer Contribution | 8.33% of wages (up to wage ceiling) | No Change – 8.33% continues |
| Central Govt. Contribution | 1.16% of wages | No Change – 1.16% continues |
| Pension Formula | Pensionable Salary × Pensionable Service ÷ 70 | No Change – Same formula |
| Pensionable Salary | Average of last 60 months | No Change – Same rule retained |
| Minimum Qualifying Service | 10 Years | No Change – 10 Years |
| Superannuation Age | 58 Years | No Change – 58 Years |
| Minimum Monthly Pension | ₹1,000 (since 1 September 2014) | No Change – remains ₹1,000 |
| Early Pension | From 50 years with reduction | 4% reduction for each year before superannuation |
| Deferred Pension | Available | Up to 60 Years – 4% increase for each completed year of deferment |
| Family & Other Benefits | Widow, Child, Orphan, Disablement Pension available | Retained with detailed & clearer provisions |
| Claim Settlement | No statutory timeline | Claims to be settled within 20 days. Delay attracts 12% interest |
| Scheme Certificate | Available | Continued – allows service preservation for future employment |
| Higher Pension Option | Paragraph 11(4) available (now closed) | Omitted – provisions for those who exercised joint option continue |
| Digital Compliance | Limited | Strong focus on electronic records & online compliance |
| Annual Report | Not specifically prescribed | EPFO to submit annual report to Central Government |
What Has Not Changed in EPS 2026
The core structure of the EPS scheme remains intact, ensuring continuity for millions of employees and pensioners:
- Employer contribution of 8.33% of wages to the pension fund remains unchanged
- Central Government contribution of 1.16% of wages continues
- Superannuation age remains 58 years
- Pension calculation formula remains the same – Monthly Pension = (Pensionable Salary × Pensionable Service) ÷ 70
- Pensionable salary continues to be the average monthly salary drawn during the last 60 months before exiting the pension fund
- Minimum qualifying service remains 10 years
- Minimum monthly pension remains ₹1,000 – the same amount that has been in force since 1 September 2014
- Widow, child, orphan, and disablement pension continue
- Wage ceiling remains ₹15,000 per month
- Scheme Certificate facility continues for members leaving before pension
- Members with less than 10 years of service remain eligible for withdrawal benefits as per statutory provisions.
What’s New in EPS 2026
1. Legal Framework Alignment with Social Security Code, 2020
The most significant change is the shift in governing law. The EPS, 2026 now operates under the Code on Social Security, 2020, replacing the EPF & MP Act, 1952 framework. This integration creates a more cohesive and streamlined approach to social security administration.
2. 20-Day Claim Settlement Timeline with 12% Interest on Delay
Under the new scheme, pension claims must be settled within 20 days from the date of receipt of a complete claim. If a claim is not settled within 20 days without sufficient reason, 12% per annum interest is payable on the benefit amount. The interest is recoverable from the officer responsible for the delay, creating strong accountability.
3. Deferred Pension Benefits with 4% Annual Increment
Members can now defer their pension up to 60 years of age. The pension increases by 4% for every completed year of deferment. This provides an incentive for members to continue working beyond the superannuation age of 58 years.
4. Enhanced Family Benefits with Clear Priority List
The scheme introduces a clear priority list for family pensions and guarantees lifelong support for disabled children, including dependent parents as beneficiaries. Detailed provisions have been made for widow, child, orphan, disabled child, nominee, and dependent parents.
5. Clear Membership Provisions
The new scheme defines eligibility, continuation, and cessation of membership, with clear treatment of existing EPS-1995 members. A member remains covered under the scheme until reaching the age of superannuation, withdrawing benefits, receiving pension, or in the event of death.
6. Detailed Pensionable Service Rules
Clear rules have been established for rounding of service, seasonal employees, and treatment of existing member service.
7. Scheme Certificate Facility
Employees leaving before completing the minimum qualifying service for pension can obtain a Scheme Certificate to preserve their service for future employment. This allows their past service to be added if they later join another establishment covered under the EPF.
8. Digital Compliance and Electronic Records
The 2026 scheme places a strong emphasis on digital compliance, including:
- Electronic filing of employer returns
- Mandatory maintenance of digital records
- Online claim processing
- Digital inspections and monitoring
9. Annual Reporting
The EPFO is now required to submit an annual report of the scheme to the Central Government before a specified date each year, enhancing transparency and accountability.
10. Higher Pension Provisions Formally Incorporated
For members who exercised the higher pension joint option following the Supreme Court judgment under the earlier EPS-1995 scheme, the employer’s contribution on wages above ₹15,000 continues as provided under the scheme. In such higher pension cases, the employer’s contribution to the pension fund increases to 9.49% specifically due to the additional contribution on salary exceeding ₹15,000, but this applies only to those members who have exercised the valid joint option under the erstwhile provisions. The new scheme omits Paragraph 11(4) of EPS-1995, which allowed members to contribute on higher wages for enhanced pension, as this option window has now been closed.
What This Means for Employers
| Requirement | Details |
| Contribution Rate | 8.33% of wages (up to ₹15,000 wage ceiling) – unchanged |
| Central Govt. Contribution | 1.16% of wages – unchanged |
| Higher Pension Cases | Employer contribution increases to 9.49% only for eligible members who have opted for higher pension, where contributions are made on wages exceeding the statutory ceiling of ₹15,000. |
| Digital Compliance | Electronic filing, digital records, online returns |
| Claim Assistance | Assist employees with pension claim documentation |
| Monthly Data Filing | Upload details of new joiners and leavers |
Failure to comply may result in penalties, interest, and prosecution under the Social Security Code provisions.
What This Means for Employees
Guaranteed Pension
The EPS scheme provides a monthly pension to employees who have completed 10 years of qualifying service and have reached the age of 58 years. The pension is calculated using the formula:
Monthly Pension = (Pensionable Salary × Pensionable Service) ÷ 70
| Component | Details |
| Pensionable Salary | Average monthly salary drawn during the last 60 months |
| Pensionable Service | Total years of service contributing to EPS |
| Minimum Pension | ₹1,000 per month |
| Superannuation Age | 58 years |
| Early Pension | Available from 50 years with 4% reduction per year |
| Deferred Pension | Up to 60 years with 4% increase per year |
Faster Claim Settlement
Pension claims are now required to be settled within 20 days from the date of receipt of complete claim. If delayed, the claimant is entitled to 12% interest per annum.
No-Cost Pension
Employees do not contribute anything directly to the pension fund. The pension is funded entirely by:
- Employer contribution: 8.33% of wages
- Central Government contribution: 1.16% of wages
Family Pension Benefits
The scheme provides comprehensive family pension benefits:
- Widow Pension – for the spouse of the deceased member
- Child Pension – for children until they reach adulthood
- Orphan Pension – for children who have lost both parents
- Disabled Child Pension – lifelong support for disabled children
- Dependent Parents – included as beneficiaries
Exempted Establishments
Exempted establishments can continue to operate their own pension arrangements, provided the alternative scheme offers benefits that are equal to or better than those available under EPS. However, the 2026 scheme brings more detailed governance and compliance requirements for such establishments.
Key Takeaways
| Aspect | EPS 1995 | EPS 2026 |
| Legal Framework | EPF & MP Act, 1952 | Code on Social Security, 2020 |
| Employer Contribution | 8.33% | 8.33% (unchanged) |
| Central Govt. Contribution | 1.16% | 1.16% (unchanged) |
| Pension Formula | (Salary × Service) ÷ 70 | (Salary × Service) ÷ 70 (unchanged) |
| Minimum Pension | ₹1,000 | ₹1,000 (unchanged) |
| Qualifying Service | 10 years | 10 years (unchanged) |
| Claim Settlement | No time limit | 20 days |
| Interest on Delay | Not available | 12% p.a. |
| Deferred Pension | Available | Up to 60 years with 4% annual increment |
| Digital Compliance | Limited | Mandatory electronic filing & records |
| Higher Pension Option | Paragraph 11(4) | Omitted (option closed) |
Final Thoughts
The EPS, 2026 represents a thoughtful balance between continuity and modernization. The core pension benefits that millions of Indian workers rely upon remain intact, while the new framework brings much-needed modernization through:
- Faster claim settlement – 20 days with 12% interest on delays
- Enhanced accountability – clear employer responsibilities and officer liability
- Transparency – annual reporting and public disclosure
- Simplified administration – aligned definitions and procedures
- Digital compliance – electronic filing, deposits, and record-keeping
- Deferred pension incentives – 4% annual increment for deferment up to 60 years
For employees, the EPS scheme continues to provide a guaranteed monthly pension for life after retirement – a critical financial safety net in old age. The minimum pension of ₹1,000 per month remains unchanged.
For employers, the statutory requirements are clear. Employers are required to ensure active digital compliance, timely filings, and assistance to claimants, as mandated under the Code on Social Security, 2020.
As India moves towards a digital-first, compliance-focused social security ecosystem, staying informed and updated is essential for both employers and employees.
Disclaimer: The information provided in this article is for general informational and educational purposes only and does not constitute legal, financial, or professional advice. While every effort has been made to ensure the accuracy of the information, the provisions of the EPS, 2026, the Code on Social Security, 2020, and any related notifications are subject to official amendments, judicial interpretations, and state-specific implementations. Employers, institutions, and individuals are strongly advised to consult qualified legal professionals, tax advisors, or certified compliance experts for specific guidance tailored to their circumstances. We do not accept any liability for any loss, damage, or legal consequence incurred as a result of reliance on the information contained herein.