EOBI Increases Pensions, Combats Fake Claims
The pension hike is expected to benefit thousands of private sector retirees, with the new rates effective from January 1, 2025, and a formal announcement expected to be made on Labour Day, May 1, as the EOBI continues to work towards providing sustainable social protection schemes for its beneficiaries.
The Employees Old-Age Benefits Institution (EOBI) has announced a significant increase in pensions for beneficiaries, aiming to alleviate financial struggles faced by private sector retirees, while also tackling the issue of fake claims through stricter verification processes.
The EOBI has decided to only accept Computerized National Identity Cards (CNICs) as proof of age, in an effort to minimize fraud, and has partnered with NADRA to verify pensioners' information. This move comes as the institution faces a significant challenge of around 5,000 middle-aged individuals receiving pensions using forged documents. Despite this, the government is urged to take further action, including prosecuting individuals involved in the scam and increasing the contribution model to make the fund sustainable.
Federal Minister Chaudhry Salik Hussain was briefed on EOBI's performance during the first three quarters of FY2024-25, which recorded a historic revenue of Rs 116 billion, reflecting a 40% growth. The institution added Rs 72.23 billion to its fund, after disbursing pensions and covering operational expenses. The current chairman, Dr Jawaid A Sheikh, introduced reforms, including the implementation of "Formula Pension," resulting in higher pensions for long-serving workers.
The Board of Trustees approved a proposal to increase the minimum pension by 15% effective from January 1, 2025, with an estimated annual financial impact of Rs 10 billion. EOBI has decided to increase the minimum pension by 15% for those earning over Rs10,000, and by 41% for those earning Rs10,000 or less, with the new rates effective from January 1, 2025. The total income generated by EOBI in the fiscal year 2024-25 is Rs116 billion, a 40% increase from the previous year.
The EOBI's efforts to increase pensions and combat fake claims are a step in the right direction, but the institution still faces significant challenges, including a severe shortage of human resources and the need for further government support to make the fund sustainable. The Minister expressed satisfaction over EOBI's performance and directed the management to expand the coverage of EOBI's social protection schemes, which may include extending legal coverage to institutions employing fewer than ten workers and including agricultural, domestic, financial, and legal sectors under its protection framework.