The Employees’ Pension Scheme (EPS) is a social security scheme that provides a defined monthly pension to employees in the organized sector. It was originally the Employees’ Pension Scheme, 1995 (EPS-95), which came into force on November 16, 1995, and was notified under Section 6A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. The scheme was introduced to replace the earlier Employees' Family Pension Scheme, 1971, and to ensure a continuing source of income for employees and their families after retirement, as the lump sum from the Provident Fund was often insufficient for long-term protection.
The EPS is administered by the Employees' Provident Fund Organisation (EPFO). The mechanism is contribution-based: the employer diverts 8.33% of the employee's salary (up to the wage ceiling) from their Provident Fund contribution to the pension fund, and the Central Government contributes an additional 1.16%. To be eligible for a pension, a member must have a minimum of 10 years of eligible service and typically retires at 58 years of age. The monthly pension is calculated using the formula: (Pensionable Salary $\times$ Pensionable Service) / 70. The scheme assures a minimum monthly pension of ₹1,000.
The EPS is intrinsically linked to the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, and the EPFO. A major amendment on September 1, 2014, raised the wage ceiling for compulsory contribution from ₹6,500/month to ₹15,000/month. More recently, the EPS-95 was superseded by the Employees' Pension Scheme, 2026 (EPS-2026), which was notified on June 29, 2026, under the Code on Social Security, 2020. This change primarily transfers the existing framework to the new Code, but the core provisions, such as the minimum pension of ₹1,000 and the pension calculation formula, remain the same.