New EPS Scheme 2026: How withdrawal benefit will be calculated on exit before pension eligibility

EPF members can become eligible for pensions under the new Employee Pension Scheme 2026 after being in service for at least 10 years. After completing this period, members will qualify for early pensions if they cease to be in employment or retire before attaining the age of superannuation. What if a member leaves employment early, before 10 years? What will happen to his contributions in this condition? This article explains.

"Where a member has not rendered the eligible service specified in sub-paragraph (1) of paragraph 12, on the date of exit, or on attaining the age of superannuation, whichever is earlier, such member shall be entitled to a withdrawal benefit as laid down in Table-IV or may opt to receive the scheme certificate, provided the member has not attained the age of superannuation..." the EPS 2026 rules say.

However, there is one big update to the rule:

• The full withdrawal benefit can be exercised only after completion of 36 months from the date of leaving employment.

"... in the case of exit from service before attaining the age of superannuation, the member shall become eligible to avail the withdrawal benefit only after the lapse of thirty-six months from the date on which the last contribution became due or on attaining the age of superannuation, whichever is earlier," the new rules say.

Such members may also opt for an EPS contribution certificate, which can be used in case they become employed again in the future.

How much contribution will be returned?

As per Table IV of the EPS 2026, the members' contributions to be returned will be calculated based on the number of months served. The proportion of wages to be considered for return will be as follows:

For example, suppose a member ceases to be employed after 36 months and the pensionable salary is ₹15,000. In this case, the withdrawal benefit can be calculated as follows:

Withdrawal benefit = pensionable salary x Table IV factor

As the pensionable salary considered for contribution to EPS is ₹15,000 and the Table IV factor for 36 months is 2.82, the withdrawal benefit will be = ₹15,000 x 2.82 = ₹42,300.

The EPS 2026 became effective from June 29, 2026.