The Employees' Old-Age Benefits Institution administers a contributory pension scheme under the Employees' Old-Age Benefits Act, 1976. It is compulsory for covered establishments, the employer bears the larger share of the contribution, and it produces a monthly pension for life. It is also widely evaded, and the evasion only becomes visible to the employee at retirement.
Who is covered
The Act applies to industrial and commercial establishments employing the prescribed minimum number of persons - the threshold has been reduced over time and now catches quite small employers. Once an establishment has been covered, it generally remains covered even if employee numbers later fall.
Registration is the employer's obligation, not the employee's. The employer must register the establishment with EOBI and register each insured person.
Contributions
Contributions are calculated on minimum wages as notified. The employer pays the substantial majority - five per cent - and the employee contributes one per cent. Contributions are payable monthly.
The employee's one per cent is deducted from wages. If you see an EOBI deduction on your payslip, contributions are at least being deducted; whether they are being deposited is a separate question, and it is the question that matters.
What the benefits are
- Old-age pension - payable on attaining the pensionable age, currently sixty for men and fifty-five for women, with a minimum insurable employment record of fifteen years.
- Old-age grant - a lump sum where the person reaches pensionable age but has less than the minimum fifteen years of insurable employment.
- Invalidity pension - where the insured person becomes permanently invalid before pensionable age, subject to a minimum contribution record.
- Survivor's pension - payable to the widow or widower for life, and to dependent children on the prescribed scale, where an insured person or pensioner dies.
The survivor's pension is the benefit families most often fail to claim, simply because they do not know it exists.
Checking your record - do this now, not at sixty
EOBI maintains a record of contributions against each insured person's registration number, and it can be checked. You can verify your registration and contribution history through EOBI's facilities and at its regional offices, using your CNIC and EOBI registration number.
Check it periodically during your working life. The common failures are:
- The employer never registered the establishment or the employee at all.
- The employer registered but stopped depositing contributions at some point.
- Contributions were deposited against the wrong CNIC or a misspelled name, so they do not appear on your record.
- Service with several employers was never consolidated under one registration number.
The last one is important: insurable employment is cumulative across employers. If each employer registered you afresh, the periods may sit under separate numbers and none of them reaches fifteen years. Consolidating them is an administrative process and it is far easier while the employment records still exist.
If your employer did not contribute
The obligation is the employer's and the liability follows it. EOBI has statutory powers to recover unpaid contributions from the employer, together with the prescribed additional amount for late payment, and arrears can be recovered as arrears of land revenue.
The steps:
- Complain to the EOBI regional office in writing, with your employment evidence - appointment letter, payslips, salary bank credits, experience certificate, attendance record.
- EOBI can inspect the establishment and assess the contributions due for the period of your employment.
- Escalate to the Labour Department in parallel, since non-registration also breaches labour law.
- The Act provides an adjudication and appeal mechanism against EOBI's own determinations.
Where the employer has been assessed and pays, the period is credited to your record retrospectively. This is the route by which a missing decade of contributions can be recovered, and it works better while the employer is still in business.
Claiming the pension
Apply at the EOBI regional office with:
- CNIC and EOBI registration card or number
- Evidence of employment history - service certificates from each employer
- Bank account details for direct credit
- For a survivor's claim: the death certificate, the nikah nama or proof of relationship, and the CNICs of the claimants
EOBI is not the only scheme
EOBI covers old-age and survivors. Separate provincial Social Security institutions - PESSI, SESSI, and their equivalents - cover medical treatment and sickness, injury and maternity benefits, funded by a separate employer contribution. Registration with one does not mean registration with the other, and employees who are covered often use neither.
This article describes the general position on EOBI benefits in Pakistan. Thresholds, rates and pensionable ages are set by statute and notification and change over time. It is not advice on any specific claim; contact EOBI or consult an advocate.