Planning for retirement involves more than just building savings. For eligible employees covered under the EPFO, the Employees’ Pension Scheme (EPS) provides a way to receive a regular pension after meeting the applicable service and age requirements.
The scheme is linked to an employee’s provident fund membership, with contributions made by the employer towards the pension component.
Key Takeaways
- Employees do not directly contribute to EPS; it is paid by the Central Government and your employer.
- At least 10 years of qualifying service are required for a full pension, which is paid starting at age 58.
- The formula for calculating a monthly pension is (Pensionable Salary × Pensionable Service) ÷ 70.
- The formula, accumulated benefits, and contribution rates remain the same despite the Employees' Pension Scheme, 2026 replacing EPS 1995.
- The program offers family and disability pensions in addition to a minimum monthly income of ₹1,000.
What is the Employees’ Pension Scheme (EPS)
The Employees' Pension Scheme, which was created in 1995, offers organised-sector workers a steady income upon retirement.
It is financed by a portion of the employer's provident fund contribution rather than a separate deduction from your pay. You are automatically covered by EPS if you are a member of the Employees' Provident Fund (EPF), subject to certain requirements.
From June 29, 2026, the scheme has been re-notified as the Employees’ Pension Scheme, 2026, under the Code on Social Security, 2020. It supersedes EPS 1995 and the Employees’ Family Pension Scheme, 1971.
There is no change in your contribution rates, the pension formula, or any pension already sanctioned.
Features of EPS
- Employer-funded: Only your employer and the Central Government contribute to EPS. Your own EPF deduction goes entirely to your provident fund, not your pension.
- Wage ceiling applies: Contributions toward EPS are calculated on wages up to a notified ceiling, currently ₹15,000 a month, regardless of your actual salary.
- Guaranteed minimum pension: Every eligible pensioner receives at least ₹1,000 a month, irrespective of how the formula computes their entitlement.
- Multiple pension types: EPS covers superannuation, early, disability, widow or widower, children’s, orphan, and nominee pensions.
- Portable across employers: Your pensionable service carries forward when you switch jobs, as long as you transfer your EPF and EPS account through your UAN.
Who is Eligible for EPS?
- You must be a member of the EPF scheme; new members joining at wages above the notified ceiling are covered only under specific conditions.
- You need at least 10 years of eligible service to draw a monthly pension.
- Full pension is payable from age 58; a reduced, early pension is available from age 50.
- Disability pension carries no minimum service requirement, but at least one month’s contribution must have been credited to the Pension Fund.
How Does EPS Contribution Work?
You contribute 12% of your basic salary and dearness allowance to your EPF account every month; none of this goes into EPS directly.
Your employer also contributes 12% of your wages, but this is split: 8.33% (on wages up to the ceiling) goes into EPS, and the remaining 3.67% goes into your EPF.
The Central Government adds a further 1.16% of your wages, up to the notified ceiling, directly into the Pension Fund.
All EPS contributions made across your working life form the pool used to compute your eventual pension, based on the formula below.
|
Contributor |
Contribution |
Goes To |
|
Employee |
12% of basic salary + DA |
EPF |
|
Employer |
8.33% of wages (up to ₹15,000) |
EPS |
|
Employer |
3.67% of wages |
EPF |
|
Central Government |
1.16% of wages (up to ₹15,000) |
EPS |
How to Calculate Your EPS Pension?
Your monthly pension is calculated using a fixed formula:
Monthly Pension = (Pensionable Salary × Pensionable Service) ÷ 70
For example, if you retire after 30 years of service with wages at or above the ceiling throughout, your pensionable service becomes 32 years (30 plus the 2 bonus years), and your pensionable salary is ₹15,000. Your monthly pension then works out to (₹15,000 × 32) ÷ 70, or approximately ₹6,857.
Documents Required for EPS
The following documents are required to have an EPS:
-
Universal Account Number (UAN)
-
Aadhaar card, linked and verified on the EPFO portal
-
PAN card
-
Bank account details with IFSC code, or a cancelled cheque
-
Composite claim form or the relevant pension application form
-
Life certificate, for pensioners already drawing a monthly pension
How to Apply for EPS
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Log in to the EPFO member portal or the UMANG app using your UAN and password.
-
Confirm that your KYC through Aadhaar, PAN, and bank details is verified and linked to your UAN.
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Select the claim relevant to your situation: superannuation pension, early pension, or withdrawal benefit.
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Fill in the online form, attach the required documents, and submit it for employer attestation where applicable.
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Track your claim status on the portal; complete applications are required to be settled within 20 days.
EPS Withdrawal Rules
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Withdrawal benefit: If you exit before completing 10 years of eligible service, you can withdraw your EPS corpus as a lump sum instead of waiting for a pension.
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Scheme Certificate: Instead of withdrawing, you can opt for a Scheme Certificate, which preserves your pensionable service so it counts toward your next employer’s EPS account.
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Waiting period: If you don’t join another EPS-covered establishment, your withdrawal benefit becomes payable only after a 36-month waiting period from the date your last contribution was due.
-
No lump sum after 10 years: Once you cross 10 years of eligible service, you can no longer withdraw the EPS balance; only a monthly pension applies from your eligible age.
What Happens to Your EPS Balance if You Change Job
When you change jobs, your Employees’ Pension Scheme (EPS) account remains intact rather than resetting. Because your Universal Account Number (UAN) is permanent, transferring your Employees' Provident Fund (EPF) account automatically links your prior service history to your new employer.
Carrying forward your service records across multiple jobs ensures that every month of employment adds toward the 10-year threshold needed to qualify for a monthly pension. It also protects the cumulative service period used to compute your final pension amount.
If you leave an EPS-covered job and take a career break or join a non-covered company, you can apply for a Scheme Certificate. This document acts as an official record of your accumulated service, allowing you to bridge the gap and resume counting your tenure whenever you rejoin an EPS-covered organisation in the future, without needing to withdraw your pension funds prematurely.
Conclusion
The Employees’ Pension Scheme may not show up as prominently as your take-home salary, but it’s building a guaranteed, government-backed income for the phase of life when your regular earnings stop. Knowing how your contributions accumulate, what the formula rewards, and how job changes affect your pensionable service puts you in a better position to plan around it rather than be surprised by it at retirement. Since June 2026 29, this protection continues under the Employees’ Pension Scheme, 2026, with your existing rights and pension calculations carried forward unchanged.
