The Employees' Pension Scheme (EPS) is a social security scheme and a "defined benefit" program for employees in the organized sector, administered by the Employees' Provident Fund Organisation (EPFO). The scheme's current framework is the Employees' Pension Scheme, 2026, which was notified by the Ministry of Labour and Employment on June 29, 2026, under the Code on Social Security, 2020, superseding the earlier EPS-95.
The scheme's origin lies in the Employees' Pension Scheme, 1995, which came into force on November 16, 1995, by inserting Section 6A into the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. It replaced the preceding Family Pension Scheme of 1971. The scheme was created to provide a continuing source of income to member pensioners upon retirement, disability, or to their dependents in case of death.
The EPS works through a tripartite contribution mechanism: the employee makes no direct contribution. Instead, the employer contributes 8.33% of the employee's basic salary (subject to the wage ceiling) to the pension fund, and the Central Government contributes an additional 1.16%. To receive a superannuation pension, a member must have completed a minimum of 10 years of service and retire at age 58. The monthly pension is calculated using the formula: (Pensionable Salary $\times$ Pensionable Service) / 70. Pensionable Salary is the average monthly pay of the last 60 months of service.
The scheme has seen significant recent changes: the wage ceiling for mandatory coverage was raised from ₹15,000 to ₹25,000 per month, effective September 17, 2026, expanding eligibility for new employees. Furthermore, the Supreme Court's ruling on November 4, 2022, allowed a select category of employees to opt for a higher pension based on their actual salary above the statutory ceiling. While the EPS-2026 replaces the EPS-95, key provisions like the contribution rate and the minimum pension of ₹1,000 per month remain the same.