The Central Government has implemented the Employees’ Pension Scheme (EPS), 2026. Introduced under the Code on Social Security, 2020, this new scheme replaces the EPS-1995 and the Employees’ Family Pension Scheme, 1971. The objective of the new scheme is to provide employees with a regular monthly pension after they complete a minimum of 10 years of pensionable service. However, many employees wonder if the method for calculating the pension has changed under the new scheme. The answer is no; the formula for calculating the monthly EPS pension remains the same in EPS-2026.

**How ​​the monthly EPS pension is calculated**
Under EPS-2026, the monthly pension is calculated using the following formula:
Monthly EPS Pension = (Pensionable Salary × Pensionable Service) ÷ 70
Here, 'pensionable salary' refers to the average monthly salary drawn during the last 60 months (5 years) before leaving the job or retirement. For instance, if an employee has an average pensionable salary of ₹15,000 and has completed 10 years of eligible service, they could receive a pension of approximately ₹2,143 per month.

**How ​​much pension can one get after 10 years of service?**
If an employee has completed at least 10 years of pensionable service, the estimated monthly pension will depend on their average basic salary. For example, an average basic salary of ₹10,000 would yield a monthly pension of approximately ₹1,429. Similarly, the estimated monthly pension would be ₹1,571 for a salary of ₹11,000; ₹1,714 for ₹12,000; ₹1,857 for ₹13,000; ₹2,000 for ₹14,000; and approximately ₹2,143 for an average salary of ₹15,000.

**Who can become a member of EPS-2026?** According to the government notification, employees joining the EPF scheme on or after June 29, 2026, whose salary falls within the government-prescribed limit, will be eligible to become members of the new EPS-2026 scheme. Additionally, employees who were previously members—or eligible to become members—of the EPS-1995 or the Employees’ Family Pension Scheme, 1971, will also fall under the ambit of this new scheme.

What happens if an employee leaves the job before completing 10 years?
If an employee leaves their job before completing 10 years of eligible service, they will have two options, just as before: they can either withdraw their accumulated amount by availing the 'Withdrawal Benefit' or obtain a 'Scheme Certificate'. If they subsequently join another EPF-covered establishment, they can merge their previous service with the new service to avail pension benefits.

What has changed in EPS-2026?
While the method of calculating the pension remains unchanged, several administrative reforms have been introduced in the new scheme. A target has been set to settle pension claims within 20 days. A provision has been made to pay 12% annual interest to the member if the EPFO ​​delays claim settlement without a valid reason. Furthermore, provisions related to 'Higher Pension' have been incorporated into the scheme, and digital compliance has been made mandatory for employers.

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