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India Guarantees Pension Continuity Under EPS 2026
The government confirmed existing EPS 1995 and EFPS 1971 beneficiaries won't lose benefits under the new scheme, removing a key uncertainty for pension funds and sovereign bond markets.
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The Government of India guaranteed that all beneficiaries under the Employees' Pension Scheme (EPS) 1995 and the Employees' Family Pension Scheme (EFPS) 1971 will retain their full benefits under the newly notified EPS 2026. The clarification came in a written reply in the Lok Sabha on May 27. It ended weeks of speculation about whether the new framework would alter accrued rights.
Shobha Karandlaje, Minister of State for Labour and Employment, said the new scheme protects all accrued pension rights of existing beneficiaries. It replaces the earlier schemes, she said. The reply addressed a query from MP Sudheer Gupta.
The continuity guarantee removes a significant source of uncertainty for the Employees' Provident Fund Organisation. The EPFO's portfolio is heavily weighted toward government securities and high-grade corporate bonds. A disruption to the pension rules would have forced a restructuring of that portfolio. Fund managers watched for any signal the government would alter payout formulas or contribution rates. A change in those rates would have shifted the yield curve for long-dated sovereign paper, several fund managers said.