Possible reasons behind EPS,'26

This is the post from the pen of G. Srinivasa Rao, EPS95 Pension Analyst

“Possible reasons behind EPS,’26”

In the Press note released by Hon’ble Minister for Labour and Employment, Government of India, soonafter the conclusion of CBT meeting on 2nd March, 2026, it was stated that EPS,’26 is to be implemented w.e.f. 01-04-2026 duly deleting Para No. 11 (4) of EPS,’95.

Para No. 11(4) is inaddition to Para No. 11(3) in EPS,’95. While only Para No. 11(3) is applicable to those who attain 58 years on or before 31-08-2014. Those who opted for Higher Pension under Para No. 11(3) as per the Gazette Notification of 16th March, 1996 and who attain 58 years on or after 1st September, 2014 have to additional opt under Para No. 11(4) duly agreeing to contribute 1.16% share also on behalf of the Government on Wages exceeding 15,000/-.

It is “onetime” chance to employees to opt for Higher Pension as per the Judgement of the Hon’ble Supreme Court on 4th November, 2022. Hence those who opted as per the judgement includes those who attain 58 years on or after 01-04-2026.

Hence, the purpose of deleting Para No. 11 (4) should be assumed only to withdraw the demand for contribution of 1.16% on Wages above 15,000/- w.e.f. 01-04-2026.

Then what about the transfer of amount from Employees’ Provident Fund Scheme, 1952 account to Employees’ Pension Scheme, 1995 account as per the Demand Notice which also includes the share of 1.16% beyond 01-04-2026 in case of those who attain 58 years on or after 01-04-2026. Will EPFO refund the amount of 1.16% exceeding 15,000/- for the period from 01-04-2026 to the date of attaining 58 years, which was already included in the Demand Notice which the employees paid?

It seems the sole purpose of EPS,’26 is to legitimise Pro-rata calculation in case of Higher Pension though amendment to EPS,’95 with approval by Parliament.

In that case the application of calculation on Pro-rata basis for Higher Pension in case of those who attained 58 years on or before 31-03-2026 who are the beneficiaries of the Judgement of 4th November, 2022, becomes invalid as it is applied without the support of amendment.

Or will EPFO introduce Pro-rata basis with “retrospective effect” w.e.f. 01-09-2014 as per EPS,’26?
As Para No. 7 (Modification of the Scheme) which allows amendments either retrospectively or prospectively.

Then, EPFO can legitimise the calculation on Pro-rata basis not only for the beneficiaries of the judgement of 4th November, 2022 who attained 58 years on or before 31-03-2026 but also in case of those who opted for Higher Pension as per the Gazette Notification of 16th March, 1996 and attained 58 years on or after 01-09-2014 by recovery from Higher Pension already paid since 01-09-2014.

If this the case, EPFO has to refund the entire extra collection of 1.16% share on wages exceeding 15,000/- w.e.f. 01-09-2014 as this also has “retrospective effect”.

But in same Para No. 7, it was also stated that:

“however, that any such modification or annulement shall be without prejudice to the validity of anything previously done under that notification.”

Will the above wording come to the rescue of those 1) who are beneficiaries of the Judgment of 4th November, 2022 and 2) those who opted for Higher Pension as per the Gazette Notification of 16th March, 1996 and attained 58 years on or after 01-09-2014?

Is EPFO feeling that application of Pro-rata calcution in case of Higher Pension either prospectively or retrospectively, is sufficient in itself without collection of 1.16% share on wages above 15,000/- for grant of Higher Pension

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