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August 9, 2016

EOBI on verge of collapse due to wrangling over ownership


August 9, 2016

ISLAMABAD: The Employees Old-age Benefits Institution is seemingly on the verge of collapse due to wrangling between the federal government and provinces over its ownership in aftermath of 18th Amendment as well as mismanagement, massive misappropriations in funds and management’s lack of interests in its affairs.

While the pensioners were deprived of a regular raise in their rate of pension commensurate to the cost of living the institution has been turned into a business concern by purchasing and constructing private structures at the cost of meagre funds basically meant for old aged workers relief. The result is that the pensioners will not be getting any raise this fiscal year unless relevant laws are amended, the EOBI Chairman Saleh Muhammad Farooqi told the News. He said new proposals in consultation with experts team has been prepared to regularise the pension raise,  keeping the financial position of the  institution. He said 46 percent raise in pension was allowed under special arrangements last year (through government’s financial support), but the same facility is not available this year.

The institution is undergoing another huge loss in employers contributions as result of a Lahore High Court stay order against the request of a raise in contributions, and if the institution did not move an appeal to vacate the same, the institution will have to pay back huge amounts it had received. Chairman Farooqi is confident that very soon the petition will be filed in the LHC to get relief.

The EOBI is also running without its board of directors since the previous one had completed its tenure, nine months back. The EOBI chairman said, “It was a matter between the ministry and the PM House, and a notification to the effect will only be issued once a clear decision comes out.” About the good number of vacant top positions in the institution, he said it may soon be done under a new policy plan.

The EOBI, which was established in first PPP government in early 70s to provide relief to the old aged employees of the private enterprises was rocked by the disclosure of huge misappropriation of funds to the tune of around Rs40 billion in 2014, and cases against a number of its top officials, including former chairman are pending in superior courts for decision. Meanwhile, plagued by the dearth of funds for any raise in around 5 lakh pensioners in the country, the EOBI has almost been turned into a toothless body. The institution is working without a full time head as Saleh Muhammad Farooqi, a PM House officer, has also responsibility as focal person, Karachi mass transport system. At present, the chairman finds little or no time to even attend his office due to preoccupation with his duel job although, he has been appearing in important court cases overtime.

An EOBI insider who wishes not to be named has sent a text message to the chairman as follows: “Chairman Sb, we have been inviting your attention towards [The] EOBI situation which is going bad to worse day by day, but nothing is moved. Now, the EOB scheme is on the eve of collapse only due to mismanagement and non-seriousness of the management to the burning issues of the institution, like devolution issue badly effecting the performance of institution and adverse decision of the LHC (rate revision of EOB contribution) due to weakness of advocacy and concerned quarters are still silent, and the institution is losing billions of rupees pm, court u/s 33, 34 and 35 are closed, petition involved millions of rupees are pending; decision making is very poor and destroying the image of institution important positions are lying vacant if remedial steps are not taken, the EOB scheme will not be sustainable and future of millions of poor pensioners and IPS will be on stake. Kindly spare sometime and take decisions and steps to make it a viable scheme. Regards”.


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