EOB Act 1976 was enforced with effect from April 01, 1976, to achieve the objective of Article 38 (C) of the Constitution, by providing for compulsory social insurance. It extends following benefits to insured persons or their survivors:-,
EOB Act 1976 was enforced with effect from April 01, 1976, to achieve the objective of Article 38 (C) of the Constitution, by providing for compulsory social insurance. It extends following benefits to insured persons or their survivors:-
A contribution equal to 5% of minimum wages has to be paid by the Employers of all the Industrial and Commercial Organizations where EOB act is applicable. Contribution equal to 1% of minimum wages by the employees of said Organizations.
1- Employer's Contribution @ 5 % of the worker's minimum wages (i.e. Rs. 13,000) Rs. 650/= Per Month
2- Employee's Contribution @ 1 % of the worker's minimum wages (i.e. Rs.13,000) Rs. 130/= Per Month
Total Contribution per Employee Rs. 650 +130 = Rs.780/= Per Month
PROCEDURE OF COLLECTION:
Arrangement with authorized branches of Bank Alfalah
Under EOB Scheme, Insured Persons are entitled to avail benefit like, Old-Age Pension (on the event of retirement), Invalidity Pension (In case of permanent disability), Old-Age Grant (an Insured Person attained superannuation age, but does not posses the minimum threshold for pension) Survivor's Pension (in case an Insured Person is expired)
Kind of Benefits/Pension:
(Average Minimum Monthly Wages x No. of years of Insurable Employment)
Registration of Establishments (Section 11 of EOB Act 1976)
-1) Every employer shall, before the expiration of thirty days from the day on which this Act becomes applicable to the industry or establishment in respect of which he is the employer, communicate to the Institution the name and other prescribed particulars of the industry or establishment
-2) Every insured person may also communicate his name and other prescribed particulars to the Institution.
-3) On receipt of a communication under sub‑section (1) or sub‑section (2) the Institution shall register the name of the industry or establishment or the insured person in such manner, and issue to the insured person a registration card in such from, as may be prescribed.
Registration of Employers & Insured Persons under EOB Act 1976
W.E.F. July 1, 2008, when an industry or a commercial establishment has 5 or more employees or if any industry or commercial establishment employing less than 5 employees voluntarily opt to be included in the scheme
Amendments of Act XIV of 1976:
In the Employees' Old-Age Benefits Institution Act, 1976 (XIV of 1976), the Following amendments shall be made, namely:-
(1) in section 1, in sub-section (4),
(a) in clause (i),
(i) For the word "ten" occurring twice, the word "five" shall be substituted
(ii) For the colon at the end, a full stop shall be substituted and thereafter the
proviso shell be omitted; and
(b) in clause (ia) for the word "twenty", the word "five" shall be substituted;
(2) in section 9, in sub-section (1), for word "six" the work "five" shell be
(3) in section 22, in sub-section (2), in clause (ii) for the full stop at the end, a
colon shell be substituted and thereafter the following proviso shell be added
"Provided that nothing in this section shell apply to an employee insured
under this Act on or after Ist day of July, 2008."
(4) in section 47, clause (e) shell be omitted ; and
(5) In the Schedule,-
(a) for paragraph (2), the following shell be substituted, namely:-
"(2) The monthly wages of an insured person, referred to in paragraph
(1), shell be calculated on the basis of wages on which contribution were
paid in respect of the twelve calendar months immediately preceding the
date on which insured person fulfils the conditions for entitlement to any
benefits under this Act;
Provided that the old-age pension or invalidity pension payable to an
insured person and survivor's pension payable to the survivors of the
deceased insured person shall not be less than two thousand rupees per
month for pension commencing on or after 1st day of July 2008."; and
(b) in paragraph (3) for the figure "2007" the figure "2008" shell be
Click to download the EOBI forms
Bank Alfalah has joined hands with Employee Old Age Benefits Institution (EOBI) for the administration and organization of employees’ contribution and pension disbursement process in Pakistan. The process has been designed to cater to a wide base of 390,000+ pensioners, and 98,000 contributing employers. Bank Alfalah manages an average monthly pension disbursement of Rs. 8,500 for each EOBI pensioner, along with a total monthly contribution collection of Rs 2 billion from employers.
Bank Alfalah has worked on revolutionizing the pension disbursement process by making it more sophisticated and agile as opposed to the manual processes which were previously being followed. The pension disbursement process has been designed to make it completely digital through the use of branchless banking mobile wallets which will eradicate the use of physical dealing of cash at the time of pension disbursements. Instead of pension collection at branches only, Bank Alfalah has now widened the access points for pensioners. EOBI pensioners are now able to withdraw their pensions through the 10,000+ ATM network across Pakistan.
The EOBI Pension Wallet, tagged to a Union Pay International powered debit card, is an innovative financial solution that is meant to facilitate EOBI pensioners to receive monthly pensions in a secure manner with ease. EOBI pensioners will be able to receive funds directly into their wallet accounts, accessible through the prescribed channels.
No amount can be deposited or transferred into an EOBI Pension Wallet Account other than the monthly pension disbursed by EOBI.
To activate the EOBI pension card, you can simply call on our 24/7 customer support helpline at 021-111-225-229.
On the 1st of every month, the pensioner’s wallet account is credited with the EOBI pension amount. Upon successful disbursement, an SMS notification is sent to all EOBI wallet holders.
An EOBI Pensioner is able to withdraw funds from their account at any ATM in Pakistan.
How does EOBI contribution collection take place?
Manual contribution collection
Contribution Collection with Pre-generated Slip
For details about our Branchless Banking Products & Services call Alfalah Contact Centre at 021-111-225-229.
UPDATE (Feb.8, 2021): In a move to curb ghost pensioners, the State Bank of Pakistan (SBP), in accordance with the government’s new policy, has instructed banks to replace life certificates with biometric verification of pensioners twice a year.
“Pensioners will be required to undergo biometric verification from any branch of a bank maintaining his or her pension account, every year in March and September,” according to a SBP circular issued to banks.
At the age of retirement and want to claim your pension from the government? Unaware of the processes and afraid of the hassles involved? Well, we’re here to guide you on how to claim your pension, but first, let’s discuss what is EOBI, how contributions are made to the fund, and what benefits it offers for retirees.
Plan for Your Retirement with EOBI
The EOB Act came into effect from the 1st of April 1976 as part of Article 38 (C) of the Constitution, resulting in the formation of the EOBI, which stands for Employees’ Old-Age Benefits Institution. The organisation manages a compulsory form of social insurance that can be claimed by all registered individuals upon retirement after the age of 60 or by their survivors upon their passing. The institution ensures not just the collection of contributions from both employers and employees but also works towards the identification and registration of employers (both corporations and industries) and insured professionals.
A person who gets registered with the EOBI fund once remains a part of it as long as they are working with a registered employer. Upon leaving their current employment, they will once again be included in the fund as soon as they begin working with another registered employer.
EOBI pension can be claimed by an individual if they cannot continue working due to old age, invalidity, or death. It ensures a definite and continuous source of income for such individuals or their family members upon their demise.
Employers Must Register Their Organisation and Employees with the Scheme
Both employers, as well as employees, need to be registered in the EOBI database to benefit from the fund. Here’s how it works:
As per the law, all employers must register themselves with the organisation within thirty days of becoming eligible for EOBI. Once the company is registered, they must list down their employees, and ensure that each individual receives the registration card from the institution.
It is important to note that as of July 2008, a company becomes eligible for EOBI registration when it has 5 or more employees. But companies having fewer than 5 employees can also voluntarily opt to be included in the EOBI scheme.
All companies, irrespective of industry, are bound to participate in the scheme, except for employees of the state, police personnel, armed forces personnel, statutory bodies, local bodies, railway line employees, municipal committees, and other local authorities.
In most cases, registered organisations will register their employees on their own once your term of employment begins. The EOBI website gives detailed instructions for Employers so they can register both new and old employees into the system. Old employees are those who already have a record and a registration with EOBI through past employments, while new employees are generally fresh graduates with no work history or EOBI records.
EOBI urges employees to keep a check on whether their EOBI contributions are being deducted from their income once they are confirmed in their new employment. If the employer is not submitting their contribution to EOBI, the employees can fill a form and submit their own contributions as well. They can also register themselves into the EOBI database upon gaining employment with a registered firm.
Both Employer and Employee Contribute to EOBI
All registered employers and employees must contribute to the EOBI scheme on a monthly basis. The contribution rate for EOBI is as follows:
All contributions are collected by or deposited in authorised branches of Bank Alfalah and the National Bank of Pakistan. Minimum wages in Pakistan for unskilled labour as of March 2020 are PKR 17,000. However, the EOBI is being charged as per its previous amendment, where the minimum limit was PKR 13,000.
This means that PKR 130 is charged from all employees every month, while employers pay PKR 650 per month, for a total of PKR 780 that gets collected in the pension fund.
The EOBI scheme is a pension fund that allows all insured/registered individuals to avail benefits upon retirement. Here are the four major types of EOBI benefits:
This is mainly offered to all insured individuals after retirement if they have completed at least 15 years of insured service. The retirement age for men is 60, and for women, it is 55. Those in the mining profession must serve the mining industry for at least 10 years before retirement to apply for this pension. The old-age pension is payable for a maximum of 6 months before the claim.
If an insured person passes away, a survivor’s pension can be provided to their nominees. Aged parents and young widows are also considered eligible for this type of pension. As per the EOBI rules, parents of an unmarried insured employee get a pension for the next 5 years after the individual’s death. For married employees, their widows get lifelong support from the survivor’s pension if the insured person served 3 years of insured service. Children of the deceased can also claim this pension if the surviving parent chooses to remarry, and their stepfather is not willing to take financial responsibility for them.
If an insured person becomes permanently disabled, they are provided with invalidity pension to compensate for their lack of regular income. You are only eligible for this pension if your earnings drop to two-thirds of what you were getting before the disability. Moreover, you must have at least 15 years of insurable employment overall or at least 5 years of insured service overall with 3 of these immediately preceding the injury to be eligible for the claim.
This type of pension is renewed every 6 months based on medical reports, and if it continues for more than 5 years, it is converted into a lifelong invalidity pension. This pension is also applicable to just the last 6 months before you make a claim.
Old-age grants are generally granted to people who reach the age of retirement but do not meet the minimum criteria to be able to claim for their pension. This grant is paid once and in full, based on a month’s average wage, multiplied by the number of years spent in insurable employment.
The rate of EOBI pension is calculated for old age and invalidity pension using the following formula:
Pension = [Average Monthly Wages] x [Number of Years Spent in Insurable Service] / 50
It is important to note that the minimum pension in September 2018 was PKR 6,500, while the maximum amount can vary as per the calculation based on the above formula. The minimum amount will be raised to PKR 8,500 from the year 2021. The organisation has also leased EOBI property to private owners so that additional revenue can be collected for the pension fund, after which it plans to increase the minimum pension rate to PKR 15,000.
You Can Apply for Your Pension With a Few Simple Steps
EOBI recently digitalised all of its records and database, making it easier than ever to not only claim but also check your collected pension fund online. The organisation also released a press release some time back that all those individuals who have reached their age of retirement (60 for men and 55 for women), should contact EOBI with their claims.
Here’s how to claim your pension with ease:
Office of Director General (Operations), 3rd Floor, EOBI House (Ex Awami Markaz), Main Shahrah-e-Faisal, Karachi.
Once you claim your benefits, they will be paid via designed bank branches, Easy Paisa, or NADRA outlets.
You’ll need to send a list of documents to the address mentioned above to file an EOBI claim. However, the documents differ slightly, based on whether you are claiming pension for yourself or are a surviving relative of an insured deceased individual. We’re listing down documents for both:
Documents for Insured Individuals(who are alive)Documents of Insured Individuals(who are deceased)EOBI Registration Card PI-03 (if available)EOBI Registration Card PI-03 (if available)Certificate/Proof of EmploymentCertificate/Proof of EmploymentCopy of CNICCopy of CNIC–Nikah Nama of the spouse (Widow/Widower)–Death Certificate issued by NADRA–Proof of relationship with the deceased(FRC issued by NADRA)