EOBI minimum pension raised to Rs5,250

ISLAMABAD: The government has announced relief for pensioners of the Employees Old-Age Benefits Institution (EOBI) by increasing their minimum pension by 46 percent to Rs5,250 per month from existing Rs3,600 per month.
The 46 percent relief will expose the federal government and the EOBI to additional burden of Rs6.67 billion. And to this effect, the federal government and the EOBI will equally share the burden.
The federal government has taken this decision purely on humanitarian grounds and that’s why it has increased the minimum pension of EOBI pensioners from Rs3,600 to Rs5,250 per month, which will benefit two million people.
Federal Finance Minister Ishaq Dar announced this here on Saturday in a press briefing.
The increase has been given with effect from April 1st, 2015 and 337,000 pensioners will get benefit, said Dar. There are 525,000 total EOBI pensioners and one-third of them were already receiving pensions above the minimum benchmark.
About 52% of the total EOBI pensioners are in Punjab, followed by Sindh that houses 31%, while 13% are in Khyber Pakhtunkhwa and rest of the 4% are in Balochistan and federal territory.
Under the 18th amendment in the Constitution, the EOBI was supposed to be devolved to the provinces but the process has been halted, which created legal hindrances in giving raise to the pensioners who were employees of the private sector. The fate of the assets and the liabilities of the EOBI was the biggest obstacle in devolution.
After coming into power in June 2013, the PML-N had twice revised the minimum pension of the civil servants, raising it to Rs6,000 per month.
The EOBI is a self-sufficient and independent body and manages a fund of Rs290 billion, said Sualeh Faruqui, the chairperson of the EOBI.
Dar said it was also decided that all the legal and constitutional issues related to EOBI status will be resolved by June this year, which will also decided the quantum of employer and the employee’s contribution and the status of the assets of the EOBI.
He said employer, employee and the EOBI’s contribution has to be increased to make the institute financially viable.
After the 18th Amendment, the courts have barred the federal government to introduce amendments in the EOBI Act of 1976, which also became a hurdle in giving legal cover to increase in minimum wages. Punjab has filed a constitution petition in the Supreme Court of Pakistan (SC), seeking its intervention to get holdover the EOBI’s assets, mainly its Rs290 billion funds. Sindh has already passed an Act and established its own EOBI.
Dar said SC may take up Punjab’s petition next month. The finance minister said the federal government was committed to transfer the EOBI’s assets to the provinces. He said in past the EOBI’s assets were grossly misused, creating financial difficulties for the organisation. The EOBI scandal was one of the biggest scandals of the PPP tenure when the then management bought about Rs50 billion properties at highly exorbitant rates. The matter is already in the apex court.
He said bulk of the EOBI funds are invested in government-guaranteed investment instruments and the remaining are either invested in the stock shares and or in real estate.