New Delhi: The Employees' Pension Scheme (EPS) 2026 has come into force, replacing the Employees' Pension Schemes of 1971 and 1995. The new scheme will not affect the higher pension permitted by the Supreme Court. There is also no change in the formula used to calculate pensions.

Pension claims without deficiencies must be settled within 20 days. If they are not processed within this period, interest at 12 per cent must be paid for the delayed period. The amount must be paid to the applicant from the salary of the PF Commissioner.

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The new scheme came into effect on June 29, the date on which the notification was issued. Employees joining from that date onwards will be covered under EPS 2026. Those enrolled under the previous schemes may opt to switch to the new scheme. Employers must submit employees' details to the PF Commissioner within 15 days.

The new scheme does not specify the wage ceiling for the salary considered for pension calculations. Instead, it states that the government will determine the ceiling from time to time. Since 2014, the wage ceiling has been ₹15,000. Under the Supreme Court's ruling, the wage ceiling does not apply to those granted a higher pension.

For salaries up to ₹15,000, the government will contribute 1.16 per cent to the pension fund. For salaries above that amount, the additional contribution must be made by the employer. This means the employer must contribute 8.33 per cent for salaries up to ₹15,000 and 9.49 per cent for the amount above ₹15,000 from its share.

Employees with more than 10 years of service will be eligible for a pension even if they leave employment after the age of 50. However, the pension will be reduced by 4 per cent for every year below the age of 58.

A key feature of the new scheme is that pensionable service will be rounded to the nearest year. Service of less than six months will not be counted as a year, while service of more than six months will be treated as one full year.