EPS 2026 replaces EPS 1995: employer contributions, member rights, and new service standards
On 29 June 2026, the Ministry of Labour & Employment notified the Employees' Pension Scheme, 2026 under the Code on Social Security, 2020, replacing EPS 1995. Contribution rates remain unchanged at 8.33% employer + 1.16% Central Government, accrued pension rights are protected, and new claim-processing timelines apply.
CA Harun Raaj
Chartered Accountant · Harun Raaj & Associates
Legal basis: Section 15-exporters)(1)(b) of the Code on Social Security, 2020 — Effective: 29 June 2026 (G.S.R. 526(E)). Source: Ministry of Labour-security-agency) & Employment notification. Last reviewed by CA Harun Raaj: July 2026.
On 29 June 2026, the Ministry of Labour & Employment notified the Employees' Pension Scheme, 2026 (EPS 2026) under Section 15(1)(b) of the Code on Social Security, 2020. It replaces the Employees' Pension Scheme, 1995 and the Employees' Family Pension Scheme, 1971. This notification came alongside the new Employees' Provident Funds Scheme, 2026 (G.S.R. 525(E), same date), together operationalising the provident-fund and pension architecture of the labour code.
If you run payroll or are an EPF-covered member, the pension fund regime is now codified under a fresh statutory scheme — but the contribution mechanics and member protections remain carefully preserved.
What changed: legal foundation and service standards
1. New statutory home. EPS 2026 now sits under the Code on Social Security, 2020, displacing the EPF & Miscellaneous Provisions Act, 1952. The Code's uniform definition of "wages" (where excluded allowances exceed 50% of total remuneration, the excess is added back) now governs the pensionable-wage base for EPS contributions.
2. Contribution rates unchanged. This is critical reassurance:
3. Accrued rights and existing pensioners protected. Every pension already sanctioned and every entitlement already accrued under EPS 1995 or the 1971 scheme continues to be governed and protected without disturbance. Existing pensioners face no change in pension payment or conditions.
4. Service standards and claim timelines. The scheme introduces defined operational parameters: valid pension claims must be settled within 20 days; any deficiency in documentation must be intimated within the same period. Where settlement is delayed without sufficient reason, interest at 12% per annum accrues on the delayed amount and is recoverable from the responsible officer. These provisions inject accountability into claim processing.
Key point: EPS 2026 preserves contribution rates and accrued member rights while upgrading claim-processing standards and shifting the scheme's legal home to the Code on Social Security, 2020.
Who is affected and what to do
Employers with EPF-covered payroll: No change to contribution rates. Update payroll and employee communications to reference EPS 2026 (not EPS 1995) for new members joining on or after 29 June 2026. Confirm your wage base under the Code's 50% allowance rule — it can alter pensionable-wage computation depending on your salary structure.
Members joining on/after 29 June 2026: You become members of the new EPF Scheme 2026; your pension eligibility flows from EPS 2026. Contribution rates, vesting, and exit benefits follow the 2026 scheme rules.
Existing EPS 1995 members and pensioners: Your rights are expressly protected. Pensions already sanctioned, accrued service, and vested benefits continue unchanged. No recomputation or interruption.
For any pending or delayed pension claim: The new 20-day service standard is now a compliance obligation. If your claim has been pending beyond this timeline, the scheme imposes an accountability mechanism on the administrator.
Why this matters for your compliance
The shift from EPF & MP Act, 1952 to the Code on Social Security, 2020 is a legislative housekeeping move — but it unifies pension and provident-fund governance under one modern statute. For employers, the immediate impact is administrative: payroll systems and employee communications should reference EPS 2026 for prospective members. For members, the 20-day claim-settlement standard is your operational guarantee; delayed claims now carry statutory interest and officer accountability.
Accrued pension rights under EPS 1995 remain intact; no member loses pension entitlement or faces recomputation. Contribution rates hold firm at the long-standing 8.33% + 1.16% split.
I'm CA Harun Raaj, Visakhapatnam. If you are an employer navigating payroll changes or a member with a pending pension claim under the new service standard, reach out.
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See Also
Frequently Asked Questions
Did my pension contribution rate change under EPS 2026?+
No. The employer contribution to the pension fund remains 8.33% of wages, and the Central Government contribution continues at 1.16% of wages. The overall 12% employer PF contribution is unchanged; 8.33% diverts to pension and 3.67% to the provident fund.
Will I lose my existing pension under EPS 1995 when EPS 2026 takes effect?+
No. Every pension already sanctioned and every right already accrued under EPS 1995 or the Employees' Family Pension Scheme, 1971 is expressly protected and continues to be governed under the same terms. Existing pensioners are not disturbed.
When did EPS 2026 take effect?+
EPS 2026 was notified on 29 June 2026 under Section 15(1)(b) of the Code on Social Security, 2020 (G.S.R. 526(E)). Members joining on or after this date become members of EPS 2026.
What are the new claim-processing timelines under EPS 2026?+
Valid pension claims must be settled within 20 days. Any deficiency in required documents must be intimated to the member within the same 20-day period. If settlement is delayed without sufficient reason, interest at 12% per annum accrues on the delayed amount, recoverable from the responsible officer.
How does the Code on Social Security, 2020 define wages for EPS contribution purposes?+
Under the Code, wages include all remuneration paid to an employee. If excluded allowances exceed 50% of total remuneration, the excess is added back to the wages base for contribution calculation. This may alter the pensionable-wage computation depending on your salary structure.
Do I need to update my payroll system for EPS 2026?+
For administrative clarity, update payroll documentation and employee communications to reference EPS 2026 (not EPS 1995) for members joining on or after 29 June 2026. Contribution rates and deduction methodology remain unchanged.
Are existing EPS 1995 members protected under EPS 2026?+
Yes. EPS 2026 supersedes EPS 1995 prospectively; members already covered under EPS 1995 retain all accrued rights and continue to be governed by EPS 1995 until cessation of membership. Pensions already sanctioned are not recomputed.
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