EPS 2026: EPS 1995 and EFPS 1971 Beneficiaries Will Keep Receiving Pension Under New Scheme

What are the Key Highlights of EPS 2026?

• EPS 2026 notified under the Code on Social Security, 2020, replacing EPS 1995 and EFPS 1971.
• All existing pensioners continue to receive benefits without disruption.
• Pension calculation formula, minimum pension (Rs. 1,000 per month), and contribution rates remain unchanged.
• Scheme effective from 29 June 2026.
• Focus on digital claim processing and electronic disbursement through approved agencies.
• Accrued pension rights of all beneficiaries fully protected.

Also Check- EPS-95 Pension Scheme 1995: New Rules for Employees

What Is EPS 2026 and Why Was It Introduced?

The Employees’ Pension Scheme, 2026 is a newly notified social security framework that replaces the earlier Employees’ Pension Scheme, 1995 and the Employees’ Family Pension Scheme, 1971. The scheme was notified by the Ministry of Labour and Employment under the Code on Social Security, 2020, and came into force on 29 June 2026 (G.S.R. 527(E) dated 29 June 2026). The Central Government framed this scheme as part of a broader consolidation of labour laws under the Social Security Code, which subsumed the earlier Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.

The primary objective behind EPS 2026 is not to alter pension entitlements but to modernize pension administration. The scheme introduces electronic and digital modes of pension disbursement through approved agencies while aligning the pension framework with the Code on Social Security, 2020. It focuses on faster digital processing of pension claims and a more seamless framework for pension disbursement without impacting the pension entitlements of existing beneficiaries.

Will Existing EPS 1995 and EFPS 1971 Pensioners Continue to Receive Benefits?

Yes, all pensioners currently receiving benefits under EPS 1995 and EFPS 1971 will continue to receive their pension under EPS 2026. The Government clarified this in a written reply in the Lok Sabha on 27 May 2026 by Minister of State for Labour and Employment Shobha Karandlaje. The new scheme protects all accrued pension rights of existing beneficiaries while replacing the earlier schemes.

The EPS 1995 was originally brought into force on 16 November 1995, replacing the erstwhile Employees’ Family Pension Scheme, 1971. The EPS 2026 continues the framework for annual valuation of the Employees’ Pension Fund and review of rates of contributions and benefits, ensuring that the pension fund remains intact and benefits flow uninterrupted to all existing pensioners.

How Is Monthly Pension Calculated Under EPS 2026?

The pension calculation formula under EPS 2026 remains unchanged from the earlier EPS 1995 framework. As confirmed by the Minister of State for Labour and Employment in the Lok Sabha reply on 27 May 2026, pensionable salary continues to be the average monthly salary drawn during the last 60 months before exiting the pension fund. This means the actual computation method, including the weighting for pensionable service, stays the same for all beneficiaries.

The minimum pension of Rs. 1,000 per month, first introduced from 01.09.2014 under EPS 1995, continues under EPS 2026. This minimum pension is provided through additional budgetary support from the Central Government, over and above the regular contribution of 1.16 per cent of wages up to Rs. 15,000 per month. The annual valuation of the Employees’ Pension Fund, mandated under the erstwhile EPS 1995, also continues under the new scheme to ensure fund sustainability.

Worked Example: Consider Mr. Ram Kumar, who superannuated after 28 years of contributory service. His average monthly salary during the last 60 months before exiting the pension fund was Rs. 20,000. Under EPS 2026, his pensionable salary for calculation purposes remains Rs. 20,000, being the average of the last 60 months as per the unchanged formula. (Note: The wage ceiling for contributions is generally Rs. 15,000 per month, unless an option for higher contributions on actual wages was jointly exercised by the employee and employer). His final monthly pension would be computed by applying the existing formula to this pensionable salary and his 28 years of pensionable service. Had his computed pension been below Rs. 1,000, the minimum pension guarantee of Rs. 1,000 per month would apply, as has been the practice since 01.09.2014.

What Types of Pension Benefits Are Available Under EPS 2026?

EPS 2026 continues the full spectrum of pension and family pension benefits that were available under EPS 1995. The scheme provides a structured safety net for members and their families across multiple life events, ensuring income security in retirement, disability, and upon death of the member.

Monthly Member Pension is payable upon superannuation or retirement after attaining the age of 58 years, subject to a minimum of 10 years of pensionable service. Members with at least 5 years but less than 10 years of pensionable service are not eligible for monthly pension but receive withdrawal benefit instead. As per the scheme provisions, continuing the formula from erstwhile Paragraph 12 of EPS 1995, the monthly pension is calculated by dividing the product of pensionable salary and pensionable service by 70.

Early Pension is available to members who have attained the age of 50 years but have not yet reached 58 years, provided they have completed at least 10 years of pensionable service. The pension payable is reduced by 4 per cent for every year the age falls short of 58 years, as specified under the scheme provisions.

Disablement Pension is payable to a member who is permanently and totally disabled while in service, irrespective of the length of pensionable service. This benefit ensures that members who suffer career-ending disabilities receive lifelong income support.

Withdrawal Benefit applies to members who exit the scheme before completing 10 years of pensionary service. Following the amendment to EPS 1995 notified on 14 June 2024 (G.S.R. 327(E) dated 14 June 2024), members with less than 6 months of contributory service also receive withdrawal benefit. The benefit is calculated proportionately based on completed months of service and the wages on which EPS contribution was received, as per the modified Table D. During the financial year 2023-24, approximately 7 lakh claims for withdrawal benefits were rejected solely due to the earlier 6-month minimum threshold. It is estimated that more than 23 lakh members benefit annually from the proportionate monthly calculation introduced through the Table D modification.

Family Pension Benefits under EPS 2026 include:

• Widow Pension: Payable to the widow of a member for life or until remarriage, at a minimum of Rs. 1,000 per month.
• Children Pension: Payable to up to two children until they attain 25 years of age, in addition to widow pension.
• Orphan Pension: Payable to orphan children at an enhanced rate when both parents are deceased.
• Disabled Children Pension: Payable to permanently disabled children for life, irrespective of age.
• Nominee Pension: Payable to a nominated person where the member has no family.
• Dependent Pension: Payable to dependent parents of an unmarried deceased member.

All these family pension benefits are payable under EPS 2026 on the same terms and conditions as they were under EPS 1995. The minimum pension guarantee of Rs. 1,000 per month, first introduced from 01.09.2014 through budgetary support, continues to apply to all categories of pensioners.

How Does the Digital Claim and Disbursement Process Work Under EPS 2026?

EPS 2026 introduces a digital-first approach to pension administration while preserving all substantive benefit entitlements. The scheme mandates electronic and digital modes of pension disbursement through approved agencies, replacing the earlier mixed manual-digital framework. This shift aims to reduce processing time, minimize physical documentation, and enable faster settlement of claims.

Universal Account Number (UAN) Continuity: Members retain the same account number allotted under the Employees’ Provident Fund Scheme. This continuity ensures that all historical contribution records, service history, and nomination details remain linked to a single identifier. Members do not need to apply for a new account number or re-register under EPS 2026.

Digital Claim Submission: Pension claims under EPS 2026 are processed through the designated EPFO portal. Members or their families can submit claims electronically with digital attestation where applicable. The scheme emphasizes faster digital processing of pension claims, reducing the time from submission to approval. The earlier requirement for physical submission of claim forms is being progressively replaced by electronic filing.

Pension Payment Order (PPO): Upon approval of a pension claim, the EPFO issues a Pension Payment Order that specifies the pension amount, the disbursing agency, and the payment schedule. Under EPS 2026, the PPO framework continues with enhanced digital integration, enabling electronic transmission of PPOs to banks and disbursing agencies.

Electronic Disbursement: Pension is credited directly to the bank account of the pensioner through approved agencies. The scheme mandates electronic and digital modes of disbursement, eliminating the need for physical cheques or manual collection. This aligns with the broader objective of the Code on Social Security, 2020 to modernize social security administration.

Time Limits for Claim Disposal: The EPFO has established prescribed timelines for receipt and disposal of pension claims. Under the digital framework, the target is to settle claims without deficiencies within 20 days. If not processed within this period, interest at 12% per annum must be paid for the delayed period. Members are advised to ensure all required documents and details are furnished accurately to avoid delays in processing.

How Does the June 2024 Withdrawal Benefit Amendment Impact Members Who Exit Early?

The Government of India amended the Employees’ Pension Scheme, 1995 on 14 June 2024 (G.S.R. 327(E) dated 14 June 2024) to address a long-standing grievance of members who exited the scheme with very short contributory service. Prior to this amendment, members who left the scheme before completing 6 months of contributory service received no withdrawal benefit whatsoever. During the financial year 2023-24 alone, approximately 7 lakh claims for withdrawal benefits were rejected solely due to this 6-month minimum threshold.

Under the amended provisions, all EPS members who had not attained the age of 58 years as on 14 June 2024 became entitled to withdrawal benefit regardless of how short their contributory service was. This change removed the complete denial of benefits for members who may have worked for just a few weeks or months. The amendment applies prospectively from the specified date and ensures that no member exits the pension framework entirely empty-handed.

Table D Modification and Proportionate Calculation

Alongside the removal of the 6-month threshold, the Central Government modified Table D to ensure that every completed month of service is taken into account for calculating withdrawal benefit. Earlier, the calculation ignored fractional periods of service after each completed year, resulting in lower payouts. The modified Table D now calculates withdrawal benefit proportionately based on completed months of service and the wages on which EPS contribution was received. This rationalization is estimated to benefit more than 23 lakh members every year.

Despite the continuity of benefits under EPS 2026, members and their families often face procedural hurdles that delay or deny rightful pension claims. Understanding these pitfalls in advance can help beneficiaries avoid unnecessary complications during the claim process.

Service Record Discrepancies remain one of the most common reasons for claim delays. When an employer fails to remit EPS contributions on time or records incorrect wage details, the member’s pensionable service and salary calculations get affected. Members should periodically verify their service history through the Unified Portal and ensure that all establishments where they worked have filed regular returns. Any discrepancy should be raised with the concerned Regional Office before submitting the pension claim.

Incorrect or Incomplete Documentation causes significant processing delays. Family pension claims in particular require submission of death certificates, marriage certificates, birth certificates of dependent children, and bank account details of the claimant. Missing or mismatched documents lead to rejection or return of the claim for resubmission. Members should maintain a dedicated file of all original documents and keep multiple attested copies ready for submission.

Failure to Update Nomination creates complications for family pension and withdrawal benefit claims. If a member’s nomination is outdated or the nominee has predeceased the member, the claim process gets entangled in legal heir verification. Members should review and update their nomination under the scheme whenever there is a change in family status, such as marriage, birth of children, or death of a nominee.

Delayed Submission After Exit can affect the effective date of pension commencement. While there is no strict deadline for submitting pension claims, delays beyond reasonable time can result in loss of arrears for the intervening period. Members approaching superannuation should initiate the claim process at least 2-3 months before their retirement date to ensure seamless disbursement from the due date.

What Should You Do Next?

Whether you are an existing pensioner, a current EPS member, or a family member of a beneficiary, taking the following steps will ensure you remain fully aligned with the EPS 2026 framework and avoid any disruption in benefits.

• Log in to the EPFO Member Portal at unifiedportal-mem.epfindia.gov.in using your UAN and verify that your pension service details, including pensionable service period and last 5-year salary history, are correctly reflected.
• Ensure your Aadhaar is linked to your UAN and that your bank account details are updated for seamless electronic pension disbursement under the new digital framework.
• If you are a family pensioner under the erstwhile Employees’ Family Pension Scheme, 1971 (EFPS 1971), confirm with your regional EPFO office that your pension payment order (PPO) has been migrated to the EPS 2026 system.
• Review your nomination details under EPS 2026, as the scheme continues the nomination provisions from EPS 1995. Update nominations if there has been a change in family circumstances.
• If you are a member with less than 10 years of pensionable service, familiarise yourself with the revised withdrawal benefit calculation under the modified Table D, which now accounts for completed months of service.
• For exempted establishments, ensure your trust has applied for continuation of exemption as per the timelines specified in the Social Security (Central) Rules, 2026, and the Employees’ Provident Funds Scheme, 2026.

Frequently Asked Questions

Sources

• The Code on Social Security, 2020 (Act No. 36 of 2020)
• Social Security (Central) Rules, 2026
• Employees’ Pension Scheme, 2026 (Notification No. G.S.R. 526(E) dated June 29, 2026)
• EPFO — Handbook on Employees’ Pension Scheme, 1995
• TaxGuru — Employees’ Provident Fund Scheme, 2026: Ten Major Changes
• EPFO — Manual of Accounting Procedure, Part III: Employees’ Pension Scheme
• EPFO — Press Brief on EPS Amendment for Withdrawal Benefit

Next Step: If you are an existing EPS pensioner or a member approaching retirement, verify that your Universal Account Number is linked to your Aadhaar and bank account on the EPFO member portal. This ensures seamless electronic pension disbursement under the new framework for EPS 2026 without any manual intervention.