Archive · 2 Sep 2026
EPS Pension 2026: Final Five Years Can Shape Retirement Benefits
The Employees’ Pension Scheme uses a worker’s final five years of wages to help calculate pension.
It does not use the average salary from the entire career.
This means promotions and pay increases near retirement can matter more.
The pension also depends on how many years the person worked under the scheme.
A basic formula multiplies pensionable wages by service years and divides the result by 70.
Usually, pensionable wages are counted only up to ₹15,000 per month.
People with at least 20 years of service may get two extra years added to their service calculation.
Some unpaid or non-contributory periods may be adjusted based on the days when wages were actually earned.
EPS calculates pensionable wages from the average monthly wages earned during the final 60 months of service.
Monthly pension is calculated using pensionable wages multiplied by pensionable service, divided by 70.
The standard pensionable-wage ceiling is currently ₹15,000 per month, unless higher pension contribution provisions apply.
Members retiring after at least 20 years of service may receive a two-year addition to pensionable service.
At ₹15,000 in pensionable wages and 35 years of service, the formula-based pension would be ₹7,500 per month.
- Who
- Eligible members covered under the Employees’ Pension Scheme.
- What
- The article explains how final-five-year wages and total pensionable service affect EPS pensions.
- When
- The relevant wage period is the 60 months immediately before a member leaves the scheme.
- Where
- Under the Employees’ Pension Scheme.
- Why
- EPS uses final-five-year average wages, rather than an employee’s entire-career average, to calculate pensionable wages.
- Pension formula
- Monthly Pension = (Pensionable Wages × Pensionable Service) ÷ 70.
- Wage period
- Pensionable wages are based on average monthly wages during the final 60 months.
- Standard wage ceiling
- The applicable standard pensionable-wage ceiling is currently ₹15,000 per month.
- Service weightage
- A two-year addition to pensionable service may apply after at least 20 years of service.
- Thirty-year example
- ₹15,000 in pensionable wages and 30 years of service produce an illustrative monthly pension of about ₹6,429.
- Thirty-five-year example
- ₹15,000 in pensionable wages and 35 years of service produce an illustrative monthly pension of ₹7,500.
- Maximum service in scheme material
- EPFO scheme material provides for pensionable service of up to 35 years, subject to applicable rules.