EPS 2026: How your monthly pension will be calculated

The Employees' Pension Scheme (EPS), 2026 has been announced by the Center to replace the Employees' Pension Scheme, 1995. The current technique for determining the monthly pension for qualified subscribers has been substantially retained.

Monthly pension formula

For members other than existing EPS subscribers covered under the transitional provisions, the monthly superannuation or early pension will be calculated using the following formula:

Monthly Pension = (Pensionable Salary × Pensionable Service) ÷ 70

The notification also states that the pension would be computed proportionately for various wage ceiling periods. On the other hand, the appropriate wage ceiling will continue to apply to the pensionable salary for each period.

How pensionable salary is calculated

The average monthly pay earned in the 60 months prior to a member's departure from the Pension Fund is known as the pensionable wage.

Extra benefit for long-serving employees

The scheme rewards long service. If a member retires on attaining the superannuation age after completing 20 years or more of pensionable service, an additional two years will be added to the pensionable service while calculating the monthly pension.

Early pension

Members can choose to start receiving their pension after attaining 50 years of age, even if they have not yet reached the superannuation age.

However, the pension amount will be reduced by 4% for every year by which it is drawn before the superannuation age.

Option to defer pension

The scheme also allows members who continue working after reaching the superannuation age to keep contributing to the Pension Fund, as long as they follow the scheme's rules.