EPS 2026: What Happens To Your Pension If You Exit Before Completing 10 Years?

The Employees’ Provident Scheme (EPS) 2026 rules mandate no pension withdrawal before completing at least 36 months of service. As per the rules (Para 12 of EPS 2026), an employee’s provident fund organisation (EPFO) subscriber is entitled to receive pension upon superannuation or an early pension before superannuation, but only when such subscriber has completed at least 10 years of service. In such cases, the pension is determined based on a formula, that is:

Monthly pension = (Pensionable wages X Pensionable service) / 70

But what happens when a subscriber quits a job before completing 10 years of service?

Pension Withdrawal Before Completing 10 Years Of Service

In cases where an employee leaves the job without completing 10 years of service, a pension under EPS is not given. Instead, a lump-sum amount is given to the subscriber. It is called ‘withdrawal benefit’.

This withdrawal benefit rule existed in the previous EPS 1995 rules, and the same has been kept in the EPS 2026 as well. However, one significant change has been made in the withdrawal benefit rules. Earlier, only completed years were considered for pension calculation, but the new rules (EPS 2026) take into account the months to calculate the withdrawal benefit.

According to Para 13(1) of the EPS 2026 rules, “Where a member has not rendered the eligible service specified in sub-paragraph (1) of paragraph 12, on the date of exit, or on attaining the age of superannuation, whichever is earlier, such member shall be entitled to a withdrawal benefit as laid down in Table-IV or may opt to receive the scheme certificate, provided the member has not attained the age of superannuation.”

What Is Table IV In The EPS 2026 Rules?

Table IV lays down the withdrawal factors used for calculating the withdrawal benefit.

Says Akhil Chandna, partner and people solutions leader, Grant Thornton Bharat: “Table IV prescribes withdrawal factors based on completed months of contributory service, unlike Table D (in the EPS 1952), which was primarily based on completed years. This provides a more granular and equitable method of determining the withdrawal benefit, particularly for members with shorter service periods.”

Here is Table IV:

Source: EPFO 2026 Gazette Notification

How Is EPS Withdrawal Benefit Calculated?

Let’s take an example of a subscriber earning Rs 15,000 per month who leaves the job after 31 months of service.

Chandna says, “Assuming the member has 31 months of contributory service, pensionable wages of INR 15,000 per month, and no past service under the Family Pension Scheme, Table IV of the Employees’ Pension Scheme, 2026 prescribes a withdrawal factor of 2.57. Accordingly, the indicative withdrawal benefit would be INR 38,550 (INR 15,000 × 2.57).”

Similarly, if a member leaves service after 25 months, the withdrawal benefit would be Rs 31,050 (Rs 15,000 X 2.07), as the factor for 25 months in Table IV is 2.07.

According to the Ministry of Labour and Employment statement in June 2024, over seven lakh EPS members leave the scheme within six months of contributory service, and these members won’t receive any pension benefit. In FY 2023-24, more than 30 lakh withdrawal benefit claims were settled.  

To ensure that everybody who has rendered service, even if for less than a six-month period, receives a proportional benefit, the government has amended the EPS-1995 rule. Earlier, a fractional period of less than six months was not considered in calculating the withdrawal benefit. That would result in a lesser amount of withdrawal benefit. This issue has been addressed by including Table IV in EPS 2026.

When Is Withdrawal Benefit Payable?

However, the benefit is payable only after 36 months of no contribution.

“Under the proviso to Para 13(1), it can ordinarily be claimed only after completion of 36 months from the date the last EPS contribution became due, or on attaining the superannuation age, whichever is earlier. If the member joins another EPS-covered establishment before that, obtaining a Scheme Certificate and carrying forward the pensionable service may be a more beneficial option,” he says.

In short, withdrawal of EPS is not mandatory after 36 months. It is the minimum waiting period before withdrawal is allowed. If you happen to quit your job before 10 years of service, you may obtain the scheme certificate to continue with the social security scheme and restart contributions as soon as you rejoin the workforce.