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In the Union Budget for 2026-27, the government may expand the scope of the Employees’ Pension Scheme (EPS) to bring employees earning up to Rs 25,000 per month under its ambit, sources told Zee Business. Currently, only employees earning up to Rs 15,000 per month are covered under the government-run social security pension programme.

However, the government plans to continue calculating the employer’s contribution based on a salary ceiling of Rs 15,000 per month, according to the sources.

Expanding the scope of the scheme could lead to bigger pension payouts and improved retirement security for eligible employees.

The sources also said that the government may consider increasing the minimum pension under the scheme from the current Rs 1,000.

Such reforms, say experts, will be in alignment with the central government’s focus on social security and long-term financial stability for the country's workforce.

If implemented in Budget for FY27, such reforms could benefit millions of employees and retirees across the country.

The Employees' Pension Scheme is a government-run social security pension scheme managed by retirement fund body Employees' Provident Fund Organisation (EPFO). Under the pension plan, the government provides pension benefits to eligible salaried individuals after they attain the age of 58.

Introduced in 1995, the EPS is aimed at ensuring pension benefits for employees in the organised sector after their retirement.

Under the EPS, eligible workers receive a monthly pension upon attaining the retirement age under certain conditions.

The scheme provides cover to subscribers on the basis of theirs and their employer's contribution to the scheme for a certain minimum number of years. The plan covers a range of contingencies such as disability and death.

Members must serve at least 10 years of total pensionable service in order to qualify for a pension under the EPS.

Normal pension under the scheme is available after a member attains the age of 58.

Employee contribution: There is no separate defined employee pension contribution under the EPS -- the employee continues to contribute 12 per cent to Employees' Provident Fund (EPF).

Employer contribution: Out of the total 12 per cent, 8.33 per cent is diverted to EPS (subject to the wage ceiling), with the remaining amount directed towards the EPF account.

Here are answers to some frequently asked questions (FAQs) about the EPS:

At what age does an EPS member receive pension?

Normal pension under EPS is available after a member attains the age of 58.

Early pension can be availed from the age of 50, subject to certain conditions including reduced pension rates.

What is the minimum service requirement for EPS pension?

Members must complete at least 10 years of total pensionable service to qualify for a monthly pension under the EPS.

This service period does not need to be continuous.

How much do employees contribute to the EPS?

There is no separate employee contribution towards EPS.

Employees continue to contribute 12 per cent of their salary to the EPF.

How much do employers contribute to the EPS?

Out of the employer’s total 12 per cent contribution, 8.33 per cent is diverted to EPS, subject to the wage ceiling.

What is the minimum pension under the EPS?

Currently, the scheme allows a minimum pension of Rs 1,000 per month.