Surviving on Paltry EOBI Pension

[wp_ad_camp_1]By Chronicler


Last week of every month, Asma Bibi, a widow of a factory worker, wants the dying days to morph into the next month at the rate of knot; only to get her husband’s pension from Employees’ Old-Age Benefits Institution (EOBI) for paying off a great portion of her expenses.

She needs money to pay her utility bills, fee of her college-going daughter and a lot more things in life, which require money to move on. Landing of a meager amount of Rs. 5,250 into her purse from EOBI means a lot to her in her bid to make both ends meet.

Asma Bibi can’t draw the entire amount of her pension from ATM card because withdrawal of less than Rs. 500 is not allowed. She is required to keep Rs. 250 in her account as ‘balance’ at one month so that she could withdraw it next month when the amount reached to least withdrawal figure. She was not blessed with this tiny amount of pension out of blue.

The factory, where her late husband worked, used to deduct some amount from his salary to deposit it along with its own share with EOBI so that he could get pension after retirement. Three years ago her husband passed away and she became beneficiary of his pension. College fee of her daughter is more than Rs. 5000 and this tiny amount means a lot for this family.

She is not alone who desperately waits crediting of her account with EOBI’s pension. There are million others like her who are dependent on this meager amount of pension. These persons are always keen to know when the federal government would announce increase in their pension which is being paid to them under the head of “EOBI”. But announcement like it are rarely made and whenever they are made a lot propaganda and advertisement is made to portray how pro poor the rulers are.

On the other hand EOBI is facing huge deficit in payment of pension to it pensioners on account of some reasons. During the term of previous National Assembly a parliamentarian had asked a question about EOBI to which it was stated in written answer that during the past few years despite massive increase in contributions from all provinces excluding Sindh, EOBI is facing huge deficit every year in disbursement of pensions amongst the registered pensioners.

So far since 2012-13 till 2018, the EOBI suffered deficit of Rs21.740 billion against the total collection up to the tune of Rs70.245 billion, the parliamentarians were informed by the Ministry for Overseas Pakistanis and Human Resource Development.

The ministry had also revealed that against Rs70.245 billion collected contribution in five years, the EOBI disbursed pension up to the tune of a total of Rs91.985 billion thus suffered loss of Rs21.740 billion in the mentioned period.

In 2012-13 annual contribution collected stood at Rs10.846 billion against Rs13.891 which were disbursed in payment of pensions while the organization had the excess/deficit of Rs3.045 billion.

In 2013-14 against annul Rs12.727 billion received as contribution Rs14.717 billion worth pension was disbursed while EOBI faced Rs1.990 billion deficits this year.

Against Rs13.007 billion collections by EOBI Rs16.320 billion worth pension was disbursed in 2014-15 and the organization faced deficit of Rs3.313 billion loss in the same year.

In 2015-16, Rs15.335 billion received collection Rs22.848 billion worth pension was disbursed thus faced loss of Rs7.513 billion. Likewise in 2016-17, Rs18.330 contribution collected Rs24.209 billion worth pension was distributed and thus faced deficit of Rs5.879 billion.

The written reply maintains that the incumbent chairman EOBI assumed the charge on January 13, 2017 and during his period the deficit has been reduced from Rs7.5 billion to Rs7.8 billion.

The EOBI pension is increased on the basis of actuarial valuation of EOBI Fund. The actuarial in its last report did not recommend the increase of pension. But the government has increased the minimum pension from Rs3600 per month to Rs5250 per month on humanitarian ground in April 2015. The annual financial impact of increased pension is Rs6.667 billion, stated the reply with regard to reasons of the deficit of which is being faced by EOBI.


According to the written reply the amendment made in EOBI Act 1976 during 2005-2008 through Finance Act have been declared unlawful by the Supreme Court of Pakistan in its judgment date November 10, 2016. As the implication of the judgment the establishment having less than 10 persons have now gone out of the ambit of EOBI Act. All banks and banking companies become exempted from the net of EOBI and the rate of contribution from employees has been reduced from 1 percent of minimum wages to Rs20 per month.

Number of pensioners are being increased at an average of 40,000 annually. After the 18th constitutional amendment, the Sindh Government has enacted its own EOBI Act 2014 under which the federal act in this connection has been repealed in the province.

The EOB Act 1976 was enforced with effect from April 01, 1976, to achieve some objective of Article 38 (C) of the Constitution, by providing for compulsory social insurance. It extends benefits to insured persons or their survivors including Old-Age Pension, Survivor’s Pension, Invalidity Pension and Old-Age Grant.

Currently Pakistan Tehreek-e-Insaaf led government is yet to decide whether to increase the pension of registered pensioners of EOBI or not. For the past three to four years no increase was made in the pension of these pensioners who are mostly elderly persons and going through the age in which they can’t do something else to earn living. There are some social responsibilities of the state which need to be fulfilled and awarding some extra amount to these pensioners is strongly required so that they can survive bit easily.


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