EOBI devolution to provinces resented

PESHAWAR: The participants of a training workshop on Tuesday asked the federal government to address the reservations of the working class over the devolution of the Employees Old-Age Benefits Institution (EOBI).
President of the Pakistan Workers Federation (PWF), Khyber Pakhtunkhwa, Razim Khan, its coordinator Shaukat Anjum and master trainer Ishaq Khan briefed the participants about the devolution of the EOBI and its impacts on the working class.
Razim Khan said under the 18 Amendment to the Constitution introduced in 2010, the federal government had empowered the provinces and devolved various institutions and ministries to the provinces.
He said the EOBI was also devolved to provinces. Sharing details about the institution, he said that the federal government had promulgated Old-Age Pension Ordinance, 1972 under which the provinces had to institute a scheme of Old-Age Benefit.
However, he said that none of the provinces launched such a scheme. Therefore, he said that the federal government took the responsibility and established the EOBI in 1976 under the EOB Act 1976.
He said that to date the EOBI had registered 101,024 employers while the active registered establishments are 67,804. He added that about 0.5 million persons, including pensioners, widows, orphans and physically challenged persons were benefiting from the scheme.
Razim Khan said that the devolution of the institution had caused concern among the labourers and the working class. “As per the present provisions of the law there is no regular contribution from the federal or provincial government to the workers pension fund,” he said, adding, “The employers pay 5 percent and I percent money is deducted from the employees’ minimum wage, which are the major contributions to the fund. He said under the 1976 Act an employee is entitled to pension after 15 years of employment.
Razim Khan said after the passage of the 18 Amendment to the Constitution, the provincial government had to prepare a roadmap for the devolved ministries and other institutions within three years.
However, he said the provinces didn’t do anything in this regard even after the passage of more than five years.
He said only two provinces- Punjab and Sindh- would benefit from the devolution of the EOBI while the Khyber Pakhtunkhwa and Balochistan provinces would be affected by the move. Explaining his point, he said that Punjab and Sindh were the major contributors to the EOBI fund.
KP’s contribution to the fund was only 645 million while the benefit outflow was 1,933 million and administrative expenditures stood at 81 million per year, he added.
Similarly, he said contribution of Balochistan to the fund was 213 million against its benefits outflow amounting to Rs191 million and the province administrative expenditures were 31 million.
He said that KP and Balochistan would suffer 1,368 million and Rs9 million deficit, respectively.
“The two smaller federating units will not be able to sustain the EOBI for long,” he maintained, adding the gap would increase further with increasing number of pensioners.
Apart from this, he said that the provinces would have to build infrastructure for provincial EOBI, which would further cost the provinces.
He questioned what will be the mechanism for the portability of benefits for an insured person who had worked in another province and prefer to go back to his own province.
Giving a few suggestions, he asked the members provincial and National Assembly to use own influence to find a solution to these shortcomings and address the reservation of the working class.
He said the federal government should keep the EOBI or else bound the provincial governments to provide the matching contribution, equal to the amount being paid by the employers and employees and sovereign guarantees to the provincial institutions.
Razim Khan said that since it was clear that the smaller provinces would not be in a position to financially manage the Fund and pay the pension, Article 147 of the Constitution may be revoked which empowers a provincial government to entrust EOBI function to the federal government so the poor workers, widows, disabled and orphans should not suffer.
He also asked the government to give representation to the true representatives of the workers in the Board of Trusties to ensure rights of the workers.