EOBI Explained: 5 Reasons Every Employee in Pakistan Should Care

Описание: What is EOBI?

The Employees' Old-Age Benefits Institution (EOBI) is the pension, old age benefits and social insurance institution of the Government of Pakistan. It operates under the control of Ministry of Overseas Pakistanis and Human Resource Development. It came into formation in 1976, through the passage of the Employees' Old-Age Benefits Institution Act of 1976 by the Parliament of Pakistan, under the Pakistan Peoples Party (PPP) government of Prime Minister Zulfikar Ali Bhutto. As of June 2019, the current Chairperson of EOBI is Mr. Azhar Hameed.

EOBI operates on the partially funded basis. The insured person as well as the employer of the insured person are supposed to make contribution to EOBI during the period of insurable employment. Employers are supposed to pay 5% of the minimum wages prescribed by the government while employees are supposed to pay 1% of the minimum wages. This contribution constitutes half of the total contribution while remaining half comes from the Government of Pakistan. Government of Pakistan contributed to this scheme till 1995 but withdrew thereafter.

In addition to the contribution from employers, employees and government, EOBI invests in profitable projects to generate income for providing pension.

Employees' Old-Age Benefits Institution provides following benefits to the insured person or its survivors. An insured person typically becomes eligible to get pension after reaching the age of 60 and completing 15 years of insured service.

Old age pension - This pension is provided in an event of retirement
Survivors' pension - Survivors pension is provided to the nominees of the insured person in event of death of the insured person. As per Islamic teachings old parents and young widows are included in the survivor pension program. As per EOBI rules, parents of the unmarried employee gets pension for 5 years in case of employee's death. If any employee dies after 36 months of EOBI insurable service, his widow gets the survivors pension for the entire life. Children of the deceased insured individual are eligible to get the EOBI survivor pension even if the widow of the insured employee gets remarried given the stepfather of the children may not take the financial responsibility of the children
Invalidity pension - This pension is provided in case of disability of the insured person
Old age grant - Old age grants are given to those who have attained the superannuation age but do not meet the minimum threshold for pension
Minimum pension of ₨ 6500/- (revised w.e.f September, 2018) is provided by scheme while maximum pension is limited by the average wages during employment and years of contribution to insurance scheme.