The Ministry of Labour and Employment has notified the Employees' Pension Scheme, 2026 vide G.S.R. 527(E) dated 29th June 2026. The new Scheme has been framed in exercise of the powers conferred by clause (b) of sub-section (1) of section 15 of the Code on Social Security, 2020, and supersedes both the Employees' Family Pension Scheme, 1971 and the Employees' Pension Scheme, 1995, except in respect of things done or omitted to be done before such supersession. The Scheme will come into force on the date of its publication in the Official Gazette.
Applicability
The Scheme applies to employees of all establishments to which the provisions of Chapter III of the Code on Social Security, 2020 apply, whether under sub-section (4), or as applied under sub-section (5), (6) or (8) of section 1 of the Code.
Pension Fund and Contributions
The erstwhile Employees' Pension Fund Account continues to be maintained as the Pension Fund Account under the new Scheme. The employer's contribution remains at 8.33 per cent of wages up to the notified wage ceiling, to be remitted within fifteen days of the close of every month. The Central Government contributes at the rate of 1.16 per cent of pay, subject to limits specified by it. Where a member has exercised the joint option under paragraph 11 of the erstwhile 1995 Scheme with effect from 1st September 2014, the employer's contribution stands increased to 9.49 per cent on wages exceeding fifteen thousand rupees per month. All contributions are rounded to the nearest rupee.
Membership
The Scheme applies to every employee who, on or after the date of notification, becomes a member of the Employees' Provident Funds Scheme, 2026 (or an exempted provident fund) with wages at or below the notified ceiling, as well as to employees who were already members of, or entitled to membership of, the erstwhile 1995 or 1971 schemes. Membership continues until superannuation, availing of withdrawal benefit, death, or vesting of pension, whichever occurs earliest.
Determination of Eligible and Pensionable Service
For members other than existing members, contributory service is treated as eligible service and rounded to the nearest year. For existing members, the aggregate of contributory service and past service constitutes eligible service. Pensionable service is determined with reference to contributions actually received, and a weightage of two years is added where a member superannuates after rendering twenty years or more of pensionable service.
Pensionable Wages
Pensionable wages are computed as the average monthly wages drawn over the sixty months immediately preceding exit, determined on a pro rata basis for each wage ceiling period and subject to the applicable ceiling. Where full wages were not drawn during this period, the average of full wages actually drawn in the preceding sixty months is used instead.
Monthly Pension
A member becomes eligible for superannuation pension or early pension upon rendering not less than ten years of eligible service. The monthly pension is computed as:
Pensionable Wages × Pensionable Service ÷ 70
This is subject to pro rata determination across wage ceiling periods. Specific formulae and minimum pension amounts continue to apply for existing members depending on whether the date of commencement of pension falls before 16th November 2000, between 16th November 2000 and 16th November 2005, or after 16th November 2005, broadly mirroring the structure under the erstwhile 1995 Scheme, including past service pension computed using Table I and Table II factors.
Early and Deferred Pension
Members may opt for early pension from age fifty, with a reduction of 4 per cent for every year by which the age falls short of superannuation age. Conversely, members may defer drawal of pension beyond superannuation age, up to age sixty, with the pension amount increasing by 4 per cent for every completed year of deferment. The minimum monthly pension payable under the Scheme, subject to specified deductions, is one thousand rupees.
Withdrawal Benefit and Disablement Pension
Members who have not completed the eligible service of ten years on exit are entitled to a withdrawal benefit as per Table IV, or may opt for a scheme certificate. Members who suffer permanent and total disablement during employment are entitled to pension under paragraph 12, subject to a minimum of two hundred and fifty rupees per month, provided at least one month's contribution has been made.
Death Benefits
On the death of a member, the eligible family becomes entitled to widow pension, children's pension, and orphan pension, computed with reference to Table III and subject to prescribed minimums. Widow pension is payable until the widow's death or remarriage. Children's pension is payable to a maximum of two children until age twenty-five, with special provision for children who are permanently and totally disabled. Provisions also exist for nomination by members without a spouse or eligible child, and for payment to dependent parents where no nomination exists.
Claim Settlement Timelines
Claims complete in all respects must be settled and benefits disbursed within twenty days of receipt by the Commissioner. Deficiencies in a claim must be communicated in writing within the same period. Delay beyond twenty days without sufficient cause attracts interest at 12 per cent per annum on the benefit amount, recoverable from the Commissioner's salary.
Employer Obligations
Employers must submit a consolidated return within fifteen days of the Scheme becoming applicable, file a 'Nil' return where no employee is covered, maintain records electronically or otherwise, and furnish details of ownership, branches, and persons in control of the establishment. Exempted establishments and their boards of trustees must submit a monthly return in the form appended to the Scheme.
Exemption from the Scheme
Establishments whose employees are members of, or are proposed to be covered under, a pension scheme providing benefits at par with or more favourable than this Scheme may apply for exemption under section 143 of the Code. Applications are to be made to the Regional Provident Fund Commissioner and must be disposed of within six months, failing which exemption is deemed to have been granted.
Investment and Audit
Moneys in the Pension Fund, other than Central Government contributions, are to be invested per paragraph 35 of the Employees' Provident Funds Scheme, 2026. Central Government contributions from 1st April 2026 onward are to be invested in the Public Account of the Government of India, carrying interest of not less than 8.5 per cent. The Pension Fund accounts are subject to audit in consultation with the Comptroller and Auditor-General of India.
International Workers
Special provisions apply to International Workers, including totalisation benefits under applicable social security agreements and determination of eligible service and pensionable wages with reference to the terms of such agreements.
Conclusion
The Employees' Pension Scheme, 2026 represents a significant consolidation of pension provisions under the Code on Social Security, 2020, bringing the erstwhile 1995 and 1971 schemes within a unified statutory framework while largely preserving existing benefit structures, formulae, and safeguards for members and their families.
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