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EPS 2026 Rules Explained: Can You Get Pension If You Quit Before Completing 10 Years of Service?

Employees working in India's private sector often contribute to both the Employees' Provident Fund (EPF) and the Employees' Pension Scheme (EPS). While most people understand that EPF provides a retirement corpus, there is still considerable confusion about EPS benefits—especially among employees who leave their jobs before completing 10 years of service.

With the introduction of EPS 2026, many employees are asking whether the new framework has changed the eligibility criteria for receiving a pension. The answer is straightforward: the minimum service requirement for a monthly pension remains unchanged. However, the updated scheme introduces revised withdrawal conditions that employees should understand before making career decisions.

Here's a detailed look at what the new EPS rules mean if you resign before completing 10 years of eligible service.

What Is the Difference Between EPF and EPS?

The Employees' Provident Fund Organisation (EPFO) manages two separate retirement-related benefits for eligible salaried employees.

• EPF (Employees' Provident Fund): Builds a retirement savings corpus through contributions made by both the employer and employee. The accumulated balance, along with interest, can generally be withdrawn under applicable EPFO rules.
• EPS (Employees' Pension Scheme): Designed to provide a monthly pension after retirement, subject to meeting the prescribed eligibility conditions.

Although both schemes are linked to employment, the rules governing them are different. An employee may withdraw EPF savings under various conditions, but pension benefits under EPS depend on the length of eligible service.

EPS 2026 Retains the 10-Year Pension Eligibility Rule

The Employees' Pension Scheme (EPS) 2026, which replaces the earlier EPS 1995 framework, continues to require a minimum of 10 years of eligible service for an employee to qualify for a monthly pension after retirement.

This means employees who complete at least 10 years of eligible service can claim pension benefits upon reaching the prescribed retirement age, subject to EPFO rules.

If the service period is less than 10 years, a regular monthly pension is not available. However, employees are not left without options.

What Happens If You Leave Before Completing 10 Years?

Employees who resign before completing 10 years of eligible service generally have two choices regarding their EPS contributions.

1. Apply for Withdrawal Benefit

Eligible employees may choose to withdraw the pension amount accumulated under EPS. However, under the revised EPS 2026 provisions, withdrawal is no longer immediately available after leaving employment.

According to the updated rules, withdrawal can generally be claimed:

• 36 months after the last EPS contribution, if the employee has left service before reaching retirement age, or
• Upon reaching the prescribed retirement age, whichever occurs earlier under the applicable provisions.

This represents a significant change compared to the earlier framework, making it important for employees to plan their finances accordingly after leaving a job.

2. Obtain a Scheme Certificate

Instead of withdrawing the amount, employees can apply for a Scheme Certificate.

This option is particularly useful for individuals who expect to join another EPFO-covered employer in the future. The Scheme Certificate preserves the service period already completed, allowing it to be added to future eligible service.

For example, if an employee works for six years, changes jobs, and later completes another five years under EPFO, the combined service may help satisfy the minimum 10-year requirement for pension eligibility.

Because of this benefit, many experts recommend opting for a Scheme Certificate rather than withdrawing EPS benefits, especially for employees planning to continue working in the organised sector.

How Is the Withdrawal Amount Calculated?

Under Schedule II of EPS 2026, the withdrawal benefit is determined using a prescribed formula instead of simply returning the accumulated contributions.

The calculation primarily depends on:

• The employee's pensionable salary at the time of exit.
• The length of eligible service, measured in completed months or years as specified under the scheme.
• The withdrawal factor provided in the official schedule corresponding to the service period.

The withdrawal amount is calculated by multiplying the pensionable salary with the applicable factor specified for the employee's eligible service.

Example of EPS Withdrawal Calculation

Suppose an employee resigns after 36 months (three years) of eligible service and has a pensionable salary of ₹15,000.

In such a case, the withdrawal benefit is calculated by multiplying the pensionable salary by the withdrawal factor applicable to a three-year service period under Schedule II of EPS 2026.

The final payout depends on the official factor prescribed by EPFO for that specific length of service.

Key Takeaway for Employees

Employees planning to switch jobs or leave employment before completing 10 years should carefully evaluate their EPS options. While a monthly pension is not available without completing the minimum qualifying service, they can either claim the withdrawal benefit under the revised timelines or preserve their service through a Scheme Certificate for future pension eligibility.

Before making a decision, employees should review the latest EPFO guidelines and consider whether continuing their service in another EPFO-covered organisation could help them qualify for pension benefits in the long run.