EPS: Employees' Pension Scheme
EPS (Employees' Pension Scheme 1995) is the pension component of EPF, providing monthly pension to members after age 58 with at least 10 years of pensionable service.
Contribution: 8.33% of employer's 12% contribution is diverted to EPS, on wages up to the ceiling — ₹25,000 a month from 17 September 2026 (max ₹2,083/month), ₹15,000 from September 2014 until then (max ₹1,250/month). The employee contributes nothing separately to EPS — the entire 12% employee contribution goes to EPF. Members earning above the ceiling have their EPS contribution capped, though the 2022 Supreme Court ruling on 'higher pension' allows opt-in for actual basic pay-based contribution under specific eligibility.
Pension formula: Pensionable Salary × Pensionable Service / 70. Pensionable Salary is the average of last 60 months' wage (capped at the wage ceiling for standard EPS — ₹25,000 from 17 September 2026, ₹15,000 before — or actual basic for higher-pension opt-ins). How service before and after the September 2026 change combines for existing members should be checked with EPFO. Pensionable Service is the number of years contributed. Maximum pensionable service is 35 years. Example: ₹15,000 × 25 years / 70 = ₹5,357 monthly pension.
Eligibility: minimum 10 years service for pension. Below 10 years, withdrawal benefit (lump sum) instead. Pension starts at age 58 (or reduced pension from 50 with proportional reduction). Family pension to spouse/children if member dies. Higher Pension Option deadline was July 11, 2023 (extended several times); members with continuous EPF service since pre-September 2014 could opt for actual basic-pay-based EPS contributions.
Standard EPS pension has been modest (at most about ₹7,500/month for full 35-year service at the ₹15,000 ceiling) because the wage ceiling stayed at ₹15,000 from 2014 until it rose to ₹25,000 on 17 September 2026. The Supreme Court 2022 ruling created two tracks: standard (ceiling-capped) and higher pension (actual basic-capped). Higher pension means more EPS contributions but reduced EPF balance.
