EPFO: The Ministry of Labor and Employment has released the notification of the New Employees Pension Scheme (EPS) 2026 on June 29. With this, the era of the old EPS-1995 and 1971 Family Pension Scheme has ended. As soon as the new scheme is implemented, the question has started arising in the minds of about 6 crore EPFO subscribers whether the pension mathematics will change now? Will there be any increase in the amount received every month after retirement? The relief news for employed people is that the government has not made any changes in the monthly pension formula and the condition of minimum 10 years of service. Let us understand how your old age support i.e. your pension will be decided under this new system.
Why is 10 years of service necessary for pension?
The first and most important condition to become entitled to monthly pension under EPS is completion of 10 years of pensionable service. If you complete 10 years of service continuously or working in different companies, then you will start getting regular pension from the age of 58 years. If an employee wishes, he can choose the option of early pension even after the age of 50, but in that case the pension amount gets reduced slightly.
At the same time, if your total employment is less than 10 years, then you will not get the benefit of monthly pension. In such a situation, the employee is only left with the option of withdrawing the EPS money in lump sum or linking his old service with the new future job by taking ‘Scheme Certificate’.
How is your pension decided on a salary of Rs 15,000?
EPFO determines pension on the basis of a fixed formula. The formula is: (Pensionable Salary × Pensionable Service) ÷ 70. Here ‘Pensionable Salary’ means your average basic salary and dearness allowance (DA) for the last 60 months. According to the rules, its maximum limit for most of the employees is considered to be Rs 15,000.
Based on this formula, if your pensionable salary is Rs 15,000, then after 10 years of service you will get a pension of around Rs 2,143 per month. If your service completes 20 years, then this amount will increase to Rs 4,286 per month. At the same time, employees who complete maximum pensionable service of 35 years can get a pension of Rs 7,500 every month. The longer you work, the stronger your financial security will be after retirement.
Don’t make this big mistake while changing jobs, otherwise you will suffer losses.
Under the current rules, the government has fixed the minimum pension limit at Rs 1,000 per month. This means that if after working for 10 years your pension is less than Rs 1,000 in the calculation (say Rs 500), then the government will combine the remaining amount and give you the full Rs 1,000. However, in view of rising inflation, there has been a demand for a long time to increase this minimum amount from Rs 5,000 to Rs 7,500, but the government has not yet taken any official decision on this.
An employed person often changes companies for career growth. While changing jobs, it is very important to transfer EPF and EPS to the new company. Many times people withdraw the EPS money in a hurry even before the completion of 10 years. Due to this, pensionable service gets interrupted and the right to regular pension may be lost in future. Therefore, whenever you change jobs, transfer your PF account through your UAN. With this, your service history will be continuously linked and you will be able to easily fulfill the eligibility of 10 years.
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