Retiring at 50, 58 or 60: How much EPS pension do you lose by retiring early?

The superannuation age in the Employees’ Pension Scheme (EPS) is 58 years. But the scheme also offers early retirement to its subscribers, provided they are 50 years old and have completed 10 years of service.

On the other hand, EPS members can also defer their retirement for a maximum of two years. While they will draw a reduced monthly EPS pension by opting for an early retirement, they will get an increased pension if they defer their retirement by a year or two.

But how much EPS pension can an employee with a pensionable salary of Rs 25,000 (the new wage ceiling) and 25 years of service get if they choose to retire at the superannuation age, early and late?


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Early and deferred retirement rule for EPS pensioner

As per the EPS 2026 scheme, a member is allowed to draw an early pension from a date earlier than the superannuation age of 58, but not earlier than the age of 50 years. If they choose early retirement, their EPS pension amount will be reduced at the 4% rate for every year the age falls short of 58.

The EPS 2026 scheme also says that a member who has attained the superannuation age of 58 and is eligible for a pension is also allowed to defer the age of drawing a pension, but not beyond 60 years of age.

If the EPS member chooses to defer the pension age, the pension amount increases at the 4% rate for every completed year after the age of 58.

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Another key rule is that if the EPS member is employed at 58 years of age and opts for a deferred pension, contributions to their EPS fund are allowed till the age of 60.

How choosing early or deferred EPS pension can work for EPS members

The Employees’ Provident Fund Organisation published an EPS pension manual in November 2024, where it revealed how an EPS member can get a pension if they choose to retire early.

Age	Reduced pension as a percentage of superannuation pension
58	100%
57	96%
56	92.20%
55	88.50%
54	84.90%
53	81.50%
52	78.30%
51	75.10%
50	72.10%

Source: EPS pension manual 2024

Deferred pension amount

Age	Increased pension as a percentage of superannuation pension
58	100%
57	96%
56	92.20%

Source: EPS 2026 pension scheme

EPS pension of employee with Rs 25,000 as pensionable salary and 25 years of service

As per the EPS scheme 2026 rule, when you complete 20 years of pensionable service, the Employees’ Provident Fund Organisation (EPFO) adds two years to your service years as a bonus. So, 25 years of pensionable service will be calculated as 27 years. The pensionable salary for EPS pension is calculated at the 60-month average salary before exiting the EPS fund. We are assuming that the employee had a Rs 25,000 average salary as the average salary. We are also assuming that the 25th year of the employee’s service will be their superannuation age of 58 years.

EPS pension= (Pensionable salary x pensionable service years)/70= (Rs 25000 x 27)/70= Rs 9,643 (estimated).

This means that the EPS pensioner can get an estimated monthly EPS pension of Rs 9,643 at the superannuation age at the wage ceiling of Rs 25,000.


What can be early pension and deferred pension for such a pensioner?

Pension starting age	Estimated EPS pension (pm)
50	₹ 6,953
51	₹ 7,242
52	₹ 7,550
53	₹ 7,859
54	₹ 8,187
55	₹ 8,534
56	₹ 8,891
57	₹ 9,257
58	₹ 9,643
59	₹ 10,029
60	₹ 10,414

You can see that if the pensioner earning at the wage ceiling and with 25 years of service takes an early retirement at 50, their estimated Rs 9,643 monthly pension will be reduced to approximately 6,953.

However, if they retire at 55, just three years before the superannuation age, they can get a monthly EPS income of approximately Rs 8,534.

But if they choose to defer their retirement by just two years, their pension may increase to approximately Rs 10,414 because of two years of delay.

Can you get a Rs 12,500 monthly EPS pension on a Rs 25,000 pensionable salary?

If you have 33 years of pensionable service and Rs 25,000 of pensionable salary, your estimated pension will be Rs 12,500 per month, which will be equal to half of the current wage ceiling of Rs 25,000.

Who is eligible to get an EPS pension?

The majority of employees who were EPS members before September 1, 2014, and who have been contributing to EPS based on the wage ceiling will continue to retain their EPS membership. It is to be noted that 8.33% of the old wage ceiling of Rs 15,000, which is Rs 1,250, was being deducted from their employer's contribution towards the EPS. This contribution will rise to Rs 2,083, which is 12% of the new wage ceiling of Rs 25,000, which the government notified on September 17, 2026.

As per the earlier rule, any new employee joining an establishment from September 1, 2014, and drawing a basic pay of more than Rs 15,000 per month couldn’t get EPS membership. However, after the wage ceiling hike, employees with a basic pay above Rs 15,000 and up to Rs 25,000 will be eligible to join the EPS 2026 scheme.

After the government’s decision to increase the EPF wage ceiling, employees with a basic salary of Rs 25,000 or below will be required to become EPS members in addition to the EPF. However, they can get an EPS pension only on completion of 10 years of pensionable service.