The Employees’ Pension Scheme 1995 (EPS‑95) continues to be a vital social security measure for retired employees under the Employees’ Provident Fund Organisation (EPFO). In 2026, discussions about pension hikes, minimum pension guarantees, linking pension to Dearness Allowance (DA), and raising the wage ceiling have gained momentum. EPS‑95 provides monthly pension benefits to employees retiring after completing at least 10 years of service, with provisions for family pensions in case of death.
Minimum Pension Demands for 2026
Employee unions and pensioners have demanded a minimum EPS‑95 pension of ₹3,000–₹4,000 per month, arguing that inflation and rising living costs necessitate a higher baseline. The current statutory minimum pension is lower, leaving many retirees financially constrained. Pensioners are also seeking annual adjustments in line with inflation to ensure their purchasing power is maintained.
Linking EPS‑95 Pension to Dearness Allowance (DA)
A key demand in 2026 is linking EPS‑95 pension to Dearness Allowance, similar to the mechanism followed in government pensions. This would help ensure that the real value of the pension is not eroded due to inflation. Employees’ associations argue that periodic DA-linked revisions will stabilize retirees’ incomes and provide long-term financial security.
Wage Ceiling Considerations
Currently, EPS‑95 pension contributions are capped based on a wage ceiling of ₹15,000 per month. Many stakeholders have demanded an increase in the wage ceiling to ₹25,000 or higher so that pensions for higher-paid employees are proportionally fair. Raising the wage ceiling would enhance the retirement corpus and result in more substantial pensions for long-serving staff.
Calculation of EPS‑95 Pension
The monthly EPS‑95 pension is calculated using the formula:
Pension = (Pensionable Salary × 0.0017 × Years of Service)
Here, Pensionable Salary is the average of the last 60 months’ salary, subject to the wage ceiling.
| Component | Description |
|---|---|
| Pensionable Salary | Average of last 60 months’ salary (capped at wage ceiling) |
| Multiplier | 0.0017 per month of service |
| Years of Service | Completed years under EPF contributions |
| Maximum/Minimum Pension | Capped by statutory limits and government notifications |
This table summarizes the key components used to calculate EPS‑95 pension.
Recent Developments and Government Response
In 2026, the government has indicated that EPS‑95 pension hikes are under review, with reports suggesting that DA-linked adjustments and a slight revision in the wage ceiling are being considered. Employee unions continue to lobby for a higher minimum pension and full DA linkage to ensure equitable benefits for all retirees.
Conclusion
The EPS‑95 pension hike in 2026 remains a critical issue for retirees and future beneficiaries. Linking pensions to DA, raising the wage ceiling, and setting a fair minimum pension would provide financial security and stability to millions of EPS‑95 members. Employees and pensioners are advised to stay updated on official notifications and union communications to understand the impact of these changes on their retirement benefits.
Disclaimer: This article is for general informational purposes only. The actual implementation of EPS‑95 pension hikes, minimum pension adjustments, DA linkage, and wage ceiling revisions may vary based on government decisions, official notifications, and EPFO policies. Readers should consult official EPFO sources or HR departments for precise and updated information.