Employees’ Old-Age Benefits Institution (EOBI): Retirement Benefits

EOBI House Building

In Pakistan, the transition into retirement represents a pivotal phase in the lives of the workforce. It’s a period when financial security takes centre stage, and the government assumes a vital role in establishing a safety net through institutions such as the Employees’ Old-Age Benefits Institution (EOBI).  

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This comprehensive guide by Graana.com aims to provide a thorough exploration of EOBI, emphasising its indispensable role in safeguarding financial stability during retirement. Furthermore, it delves into the unique challenges that EOBI confronts in fulfilling the evolving needs of an aging population. 

What is EOBI? 

 In Pakistan, the Employees’ Old-Age Benefits Institution, commonly known as EOBI, is a governmental entity responsible for the management of pension, old-age benefits, and social insurance initiatives. Operating under the jurisdiction of the Ministry of Overseas Pakistanis and Human Resource Development, EOBI was established following the enactment of the Employees’ Old-Age Benefits Institution Act of 1976 by the Pakistani Parliament. 

The EOBI Act of 1976 

The backbone of EOBI’s operations lies in the EOBI Act of 1976. The comprehensive legislation outlines the institution’s objectives, powers, and functions. It empowers EOBI to carry out various functions, including identification and registration of establishments and industries, collection of contributions, fund management, and provision of benefits as per the law. The EOBI Act ensures that the institution operates within the legal framework defined by the government. 

Amendments to the Act 

Over the years, the Employees’ Old-Age Benefits Institution Act has seen amendments aimed at improving its provisions. These amendments have addressed issues such as the number of employees required for an industry or establishment to be included in the scheme.

Contributions to EOBI 

 EOBI operates on a partially funded basis, involving contributions from both insured individuals and their employers. Employers are mandated to allocate 5% of the government-established minimum wages, while employees are responsible for a 1% contribution from these wages. The remaining 50% of the aggregate contribution is supplied by the Government of Pakistan. It’s worth mentioning that government support for this program ceased in 1995. 

Under the current framework, the monthly EOBI contribution stands at Rs. 1,920 per employee, with employers contributing Rs. 1,600 and employees contributing Rs. 320 to this fund. 

In addition to these contributions, EOBI engages in investment ventures aimed at generating income, which is subsequently utilized to provide pensions and benefits to eligible individuals. 

Benefits Offered by EOBI


EOBI Pension


EOBI is designed to provide various benefits to insured persons or their survivors, ensuring financial security during old age or in times of need. These benefits include: 

Old Age Pension 

 After attaining the age of 60 and fulfilling a 15-year tenure of insured service, individuals covered by insurance become entitled to an old-age pension, which functions as a vital income stream during their retirement years. 

Survivors’ Pension 

 In the event of the untimely demise of insured individuals, a survivors’ pension is extended to their designated beneficiaries. This essential program offers support not only to elderly parents but also to young widows. If an unmarried employee passes away, the parents are entitled to receive a pension for a period of 5 years following the employee’s demise.  

Moreover, should an employee unfortunately pass away after completing 36 months of insurable service with EOBI, the widow is eligible to receive the survivors’ pension for the duration of her life. Additionally, even if the widow chooses to remarry, the children of the deceased insured individual remain eligible to receive the EOBI survivor pension. 

Invalidity Pension 

In cases of permanent disability, EOBI offers an invalidity pension, providing financial assistance to insured individuals facing physical challenges. 

Old Age Grant 

 Allocations of old age grants are directed towards those who have reached the superannuation age but do not satisfy the minimum criteria for a complete pension, ensuring that individuals with limited contributions still receive a measure of financial aid. 

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Pension Rates 


EOBI Pension Rates


 Pension benefits are subject to fluctuation, contingent upon both the mean monthly minimum wages and the duration of insurable labor. While a set minimum pension of Rs. 8,500 (adjusted in 2019) is established, the upper limit of the pension is contingent on the average wages earned throughout one’s employment and the extent of participation in the insurance scheme. 

Growth of EOBI 

Since its inception in 1977, EOBI has witnessed significant growth in terms of registered employers, insured employees, and beneficiaries. This growth demonstrates the institution’s increasing importance in Pakistan’s social security landscape. 

Here’s a snapshot of the growth: 

  • 1977: 5,447 participating employers, 8,807 insured employees 
  • 1999: 42,632 participating employers, 1,465,087 insured employees, 164,203 beneficiaries 
  • 2000: 43,560 participating employers, 1,572,014 insured employees, 181,547 beneficiaries 

This consistent growth underscores the expanding role of EOBI in securing the financial well-being of the country’s workforce. 

Major Challenges to EOBI 

EOBI faces several challenges, with one of the most pressing being low contributions. The current level of contributions and returns from investments may not be sufficient to cover benefit payments and administrative expenses by 2024. Furthermore, there is an alarming estimate that the fund will be completely exhausted by 2035. 

Mitigating Actions 

To address these challenges, EOBI has undertaken several mitigating actions. Computerisation and administrative reforms have been initiated to reduce administrative expenses. This has already resulted in a decrease in administrative expenditure, from around 22% of contributions in 2002-03 to 17% in 2003-04. More efforts are needed to further reduce administrative expenses and ensure the long-term sustainability of the scheme. 

Functions of Regional Offices 

Regional offices play a crucial role in EOBI’s operations, including: 

  • Registration of employers and employees 
  • Collection of contributions 
  • Verification of contributions from employers’ records 
  • Oversight of contribution collection and pension disbursement at bank branches 
  • Record maintenance of employers, employees, and pensioners 
  • Pre-audit of claim cases 
  • Pre-audit of management expenses 
  • Dealing with commercial audits 

Benefits and Pension Formula


Benefits and Pension Formula of EOBI


EOBI offers various kinds of benefits and pensions, including old-age pensions, survivor’s pensions, invalidity pensions, and old-age grants. The pension amount is calculated based on the average minimum monthly wages and the number of years of insurable employment. 

Pension Formula

(Average Minimum Monthly Wages X No. of years of Insurable Employment) / 50 

EOBI Registration 

EOBI registration is a crucial aspect of the institution’s operations. Employers and insured persons are required to register with EOBI. This process involves the communication of relevant information and the issuance of registration cards. 

The Role of the Dispute Resolution Committee 

The EOBI Dispute Resolution Committee is a specialised body responsible for addressing and resolving disputes, conflicts, and grievances that may arise between the institution and its stakeholders. These stakeholders include insured individuals, employers, and other parties involved in EOBI’s operations. The committee serves as a crucial mechanism for upholding transparency, accountability, and fairness within EOBI’s functions. 

Functions and Responsibilities 

The Dispute Resolution Committee is charged with several significant duties to guarantee that disputes are resolved in a fair and just manner. Its principal purposes include the following: 

Dispute Resolution 

The committee’s primary responsibility is to discuss and settle conflicts that may develop over the course of EOBI’s operations. These arguments could be over a variety of things, including differences over rewards, contributions, registration, and other EOBI service-related issues. 

Mediation and Arbitration 

In times of disagreement, the Dispute Resolution Committee serves as both mediator and arbiter. This dual role involves facilitating constructive discussions and negotiations to reach mutually beneficial solutions. As mediators, they promote open dialogue, foster understanding, and encourage cooperation. When needed, the committee can also make binding arbitration decisions to ensure fair and conclusive resolutions. 

Reviewing Complaints and Appeals 

Stakeholders who are dissatisfied with EOBI’s decisions or actions have the right to file complaints or appeals. The Dispute Resolution Committee thoroughly reviews these complaints and appeals, ensuring that all relevant facts and evidence are considered. The committee then issues decisions or recommendations based on its findings. 

Ensuring Compliance 

The committee plays a vital role in ensuring that EOBI complies with its own regulations and the applicable laws. It monitors the institution’s actions and decisions to verify their alignment with legal and ethical standards. 

Providing Guidance 

Stakeholders involved in disputes often require guidance on their rights and responsibilities within EOBI’s framework. The committee offers valuable guidance to help parties understand the processes, procedures, and potential outcomes of their disputes. 

Significance of the Dispute Resolution Committee


Significance of the Dispute Resolution Committee 


The EOBI Dispute Resolution Committee holds immense significance within the institution and the broader social security landscape for several reasons: 

  • Access to Justice: It provides insured individuals, employers, and other stakeholders with access to a fair and impartial dispute resolution process. This ensures that grievances are heard, evaluated, and addressed, preventing injustices and promoting trust in EOBI’s services. 
  • Efficient Conflict Resolution: The committee expedites the resolution of conflicts and disputes; minimising delays in accessing benefits or services. Its mediation and arbitration processes help parties find solutions without resorting to lengthy legal proceedings. 
  • Accountability: By monitoring EOBI’s actions and decisions, the committee holds the institution accountable for its operations. This accountability promotes transparency and ethical conduct. 
  • Legal Compliance: The committee ensures that EOBI operates within the bounds of the law. This compliance is essential for upholding the rights and entitlements of insured individuals and employers. 


The Employees’ Old-Age Benefits Institution (EOBI) plays a vital role in Pakistan’s social security landscape. It provides financial security to employees and their survivors during old age, disability, or in case of their demise. While EOBI faces challenges, including low contributions and sustainability concerns, it continues to evolve and adapt to meet the changing needs of the workforce. As it moves forward, EOBI’s commitment to ensuring the well-being of Pakistan’s workforce remains unwavering. 

Frequently Asked Questions (FAQs) 

What is the minimum pension amount provided by EOBI? 

The minimum pension amount provided by EOBI is Rs. 8,500, as of the 2019 rules. The amount ensures that even individuals with limited contributions receive a basic level of financial support. 

How does EOBI calculate the pension amount? 

EOBI calculates the pension amount based on the average minimum monthly wages and the number of years of insurable employment. The formula involves dividing the product of these values by 50. This formula ensures that the pension amount reflects an individual’s years of service and income. 

What is the main challenge facing EOBI in the coming years? 

One of the major challenges facing EOBI is low contributions, which may lead to a fund shortfall by 2035. This challenge highlights the importance of increasing contributions and implementing sustainable financial strategies. 

How has EOBI’s administrative expenditure changed over the years? 

EOBI’s administrative expenditure has decreased from around 22% of contributions in 2002-03 to 17% in 2003-04, thanks to administrative reforms. These reforms aim to reduce costs and enhance the institution’s financial stability. 

Who is eligible for survivors’ pension under EOBI? 

Survivors’ pension is provided to the nominees of insured individuals, including old parents and young widows, in the event of the insured person’s death. This support extends to parents of unmarried employees and children of the deceased insured individual, ensuring financial security for the survivors. 

For more details, visit Graana blog. 

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