The Employees' Pension Scheme (EPS) is a social security scheme that provides a "defined benefit" pension to employees in the organized sector. It was originally launched as the Employees' Pension Scheme, 1995 (EPS-95) on November 16, 1995, under Section 6A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. The scheme was created to ensure a continuing source of income for member pensioners upon retirement and for their dependents in case of death or permanent disability, replacing the earlier Employees' Family Pension Scheme, 1971.
The scheme is administered by the Employees' Provident Fund Organisation (EPFO) and is closely connected to the Employees' Provident Fund (EPF), as EPF members are generally eligible. The mechanism is funded by contributions: the employer contributes 8.33% of the employee's salary (up to the statutory wage ceiling), and the Central Government contributes an additional 1.16%. To receive a superannuation pension, a member must have a minimum of 10 years of service and attain the age of 58 years. The monthly pension is calculated using the formula: (Pensionable Salary × Pensionable Service) / 70, with a minimum assured pension of ₹1,000.
The scheme has undergone significant recent changes: the EPS-95 was replaced by the Employees' Pension Scheme, 2026 (EPS 2026), which was notified by the Ministry of Labour and Employment on June 29, 2026, under Section 15(1)(b) of the Code on Social Security, 2020. While the new scheme modernizes the framework, the core contribution rates (employer 8.33% and government 1.16%) and the minimum pension of ₹1,000 remain unchanged. Earlier, a major amendment on September 1, 2014, raised the wage ceiling for compulsory contribution from ₹6,500/month to ₹15,000/month. Furthermore, the Supreme Court delivered a key judgment on November 4, 2022, concerning the option for employees to contribute on their actual salary for a higher pension.