Under the new EPS 2026 rules, employees leaving a job before completing 10 years of service must wait 36 months before claiming the withdrawal benefit.

EPFO EPS 2026 Update: The Employees' Provident Fund Organisation (EPFO) has introduced significant changes to pension withdrawal rules under the Employees' Pension Scheme (EPS) 2026, which came into effect on June 29, 2026. The revised rules primarily affect employees who leave their jobs before completing 10 years of pensionable service.

Earlier, eligible employees could apply for the EPS withdrawal benefit soon after leaving employment. Under the new framework, however, they will now have to wait 36 months (three years) from the date of the last pension contribution before claiming the lump-sum withdrawal benefit.

If you are planning to switch jobs or resign before completing 10 years of service, here's everything you need to know about the new rules and how your withdrawal amount is calculated.

Why Is the 10-Year Service Mark Important?

Under EPFO rules, an employee becomes eligible for a monthly pension after retirement only if they complete at least 10 years of eligible service under the Employees' Pension Scheme.

This fundamental eligibility condition remains unchanged under EPS 2026.

Employees who leave employment before completing 10 years are not eligible for a monthly pension, but they are still entitled to choose from the following options:

• Claim the EPS Withdrawal Benefit as a lump-sum amount (subject to eligibility).
• Obtain a Scheme Certificate, allowing previous pensionable service to be carried forward if they join another EPFO-covered employer in the future.

A Scheme Certificate can help employees accumulate the required 10 years of service across multiple jobs and become eligible for pension benefits later.

New 36-Month Waiting Period for Lump-Sum Withdrawal

The biggest change introduced under EPS 2026 is the mandatory waiting period for withdrawal benefits.

According to the revised rules:

• Employees leaving service before reaching the retirement age cannot immediately claim the EPS withdrawal amount.
• The withdrawal claim can only be submitted after 36 months from the date on which the last EPS contribution was credited to the account.

This means eligible employees must wait three years before receiving the lump-sum payment.

Exception to the Rule

There is one important exception.

If an employee reaches the prescribed superannuation age during the 36-month waiting period, they do not have to wait until the completion of three years and may become eligible to claim the benefit as per the applicable provisions.

How Is the EPS Withdrawal Benefit Calculated?

The lump-sum withdrawal amount is calculated using the formula specified in Table IV of the EPS 2026 rules.

Calculation Formula

Withdrawal Benefit = Pensionable Salary × Table IV Factor

The applicable Table IV factor depends on the employee's total eligible service period.

Generally, the longer the pensionable service, the higher the factor, resulting in a larger withdrawal benefit.

Example 1: Employee With Two Years of Service

Suppose:

• Pensionable Salary: ₹15,000
• Eligible Service: 24 months (2 years)
• Table IV Factor: 1.99

Calculation:

₹15,000 × 1.99 = ₹29,850

In this example, the employee would be eligible for a lump-sum withdrawal benefit of ₹29,850, subject to the applicable EPS rules.

Example 2: Employee With Five Years of Service

Suppose:

• Pensionable Salary: ₹15,000
• Eligible Service: 60 months (5 years)
• Table IV Factor: 5.02

Calculation:

₹15,000 × 5.02 = ₹75,300

With a longer service period, the applicable factor increases, resulting in a higher withdrawal amount.

Should You Choose a Scheme Certificate Instead?

Employees who expect to work again in an EPFO-covered establishment may benefit from choosing a Scheme Certificate instead of withdrawing the amount immediately.

The certificate allows pensionable service from different employers to be combined, helping employees complete the required 10 years of service for monthly pension eligibility in the future.

The right option depends on your career plans, retirement goals, and future employment prospects.

Key Points Employees Should Remember

• Monthly pension eligibility still requires 10 years of qualifying service.
• Employees leaving before 10 years can opt for a withdrawal benefit or a Scheme Certificate.
• The 36-month waiting period applies before claiming the withdrawal benefit under EPS 2026.
• Withdrawal amount is calculated using Pensionable Salary × Table IV Factor.
• Employees reaching retirement age during the waiting period may qualify for an exception under the revised rules.

Final Takeaway

The introduction of the 36-month waiting period marks one of the biggest changes under the Employees' Pension Scheme 2026. Employees planning to leave their jobs before completing 10 years of service should carefully evaluate whether taking the lump-sum withdrawal benefit or preserving their service through a Scheme Certificate better aligns with their long-term retirement planning.

Understanding these revised rules in advance can help employees make informed financial decisions and avoid unexpected delays when claiming their pension-related benefits.