EPS 2026 explained: Will employees receive a different monthly pension under the new system? Also, understand why completing 10 years of service is important for pension eligibility.
Published: July 24, 2026, 8:04 PM IST
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What is the formula to calculate your pension? File image/PTI
Every month, private employees contribute towards their Provident Fund (PF), building savings for their post-retirement years. After the introduction of EPS 2026 on June 29, EPFO members are looking for clarity on the new pension calculation method. The Ministry of Labour replaced the old Family Pension Scheme with the updated pension system.
The introduction of the new rule has not changed the existing pension calculation method. Under the current system, employees must complete at least 10 years of service to receive a monthly pension.
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An employee becomes eligible for a monthly pension after turning 58 years of age, provided they have completed 10 years of EPS contribution. Those who exit employment before completing the required 10-year service period will not be entitled to a monthly pension.
How much pension will you get after 20 years of service?
The EPFO provided a formula for withdrawing your monthly pension, which allows you to withdraw your EPS pension.
Pensionable Salary i.e.
pensionable service based on the average salary of the last 60 months i.e., the total number of years contributed to EPS
Monthly pension = (Pensionable salary X Pensionable service) / 70
If your pensionable salary is Rs 30,000 and you work for 20 years and contribute to EPS, what will your monthly pension be?
Monthly pension = (30000 X 20)/70
Monthly pension = Rs 8,571.42
Employees should note that taking out pension contributions while working could reduce their retirement benefits. This may result in a lower monthly pension after retirement.
Many employee unions across the country have been pushing for a hike in the minimum Employees’ Pension Scheme (EPS) amount from Rs 1,000 to Rs 7,500. However, when the government was questioned about any plans to raise the minimum EPS pension, no increase was announced.
Also Read | Huge relief for senior citizens: RBI modifies pension rules regarding excess credits and deductions
In response to a query in Lok Sabha this week, Shobha Karandlaje, the Minister of State for Labour and Employment, said that the government is committed to providing robust social security coverage to EPFO members while also considering the fund’s sustainability and future obligations.
