​Arbitrary and opaque, Pg8

Key Highlights:

• The Employees’ Provident Fund Organisation (EPFO)'s Central Board of Trustees (CBT) approved the Employees’ Pension Scheme (EPS) 2026 on March 2, replacing the EPS 1995.
• The new scheme affects approximately 5.4 crore contributing members and 82 lakh pensioners.
• The EPS 2026 was designed as a corollary to the Code on Social Security, 2020, which was notified in November 2025.
• The option provision for higher pension has been removed in the new scheme, and the ₹15,000 PF contribution ceiling remains unchanged.

Detailed Insights:

• The EPS 1995 has faced litigation due to alterations detrimental to employees, such as limiting coverage to those earning up to ₹15,000 a month.
• The pensionable salary calculation was changed from the average pay in the last 12 months to 60 months, reducing the eligible pension amount.
• The Supreme Court intervened in 2022, extending the higher pension option to post-2014 retirees, but pre-2014 retirees faced unrealistic conditions for eligibility.
• The EPFO's approach aims to reduce the burden of pension commitment, but greater government funding and higher contributions could address pension challenges.
• The lack of consultation with stakeholders and the removal of the higher pension option have raised transparency concerns regarding the new scheme.

Key Concepts Involved:

• Employees' Provident Fund Organisation (EPFO): An organization that manages provident fund and pension schemes for employees in India.
• Central Board of Trustees (CBT): The apex decision-making body of the EPFO, responsible for administering the schemes.
• Code on Social Security, 2020: A legislative framework in India that consolidates and amends laws related to social security.