ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has directed the Ministry of Overseas Pakistanis and Human Resources Development (MoPHRD) to present a sustainable business plan on EOBI to the rightsizing committee for consideration, sources told Business Recorder.

The ECC, in its recent meeting, also directed that the Auditor General also be invited for the meeting to apprise the Committee about the last five years audit status of EOBI.

Ministry of Overseas Pakistanis and Human Resources Development briefed the ECC that the Ministry was responsible for managing social security matters, including pensions and welfare for employees of the private sector, coordinating and monitoring labor legislation from international perspective, and engaging with international organizations in the fields of labor and social security.

EOBI pensioners urge govt to increase pension

To fulfil that mandate, MOPHRD had established the Employees’ Old- Age Benefits Institution (EOBI). The EOBI was established under the Employees’ Old-Age Benefits (EOB) Act, 1976 as an autonomous organization mandated to provide pension benefits to employees in the private sector.

The management and administration of EOBI was entrusted to a tripartite Board of Trustees, which included representation from the federal government, provincial governments, representatives of employers and employees and is headed by the Secretary MOPHRD. EOBI’s core functions include the registration of industries and employees, collection of contributions, disbursement of pensions, grievance redressal and effective fund management.

In accordance with the EOB Act, the EOBI has extended benefitsto approximately 435,000 insured persons and their survivors, including old-age pensioners and their survivors, invalid pensioners, and old-age Grant. The minimum pension was increased from Rs. 8,500/- to Rs. 10,000/- on August 17, 2023.

MoPHRD further briefed the forum that the EOBI had achieved following major milestones during Financial Year 2023-24: (i) EOBI has seen notable growth in contributions, with receipts from employers and insured persons rising from Rs. 31,492 million in 2021-22 to Rs. 39,000 million in 2022-23 and Rs. 60,000 million in 2023-24.

Investment income has also increased significantly, from Rs. 39,520 million in 2021-22 to Rs. 57,059 million in 2022-23 and Rs. 68,584 million in 2023-24.

Total receipts increased from Rs. 71,012 million in 2021-22 to Rs. 96,059 million 2022-23 and Rs. 128,584 million in 2023-24; (ii) overall, total receipts have enabled higher pension disbursements.

The pension disbursements grew from Rs. 46,446 million in 2021-22 to Rs. 51,000 million in 2022- 23 and Rs. 57,100 million in 2023-24; (iii) the number of pensioners has also increased from 396,878 in 2021-22 to 411,235 in 2022-23 and 424,750 in 2023-24; and (iv) according to the 11th Actuarial Valuation Report of EOBI Assets and Liabilities as of June 30, 2022, projected cash flows show that contributions are expected to continue

growing. However, with rising pension disbursements, the fund balance is projected to peak at Rs. 629,100 million in 2028-29 before declining.

The contributions are projected to grow at an average annual rate of 10.22 %, supporting the fund balance initially, but not sufficiently to counterbalance the rising pension disbursements over the long term. By 2036-37, under current parameters, the fund is expected to face a deficit of Rs. 237,048 million, emphasizing the need for sustainable financial measures, including an increase in the contribution collection rate from employers and additional contributions from the Federal Government.

MOPHRD apprised the forum that as per Section 19(1) of the EOB Act, 1976 the Institution shall draw up a budget for the following year and shall submit it to the Board of Trustees (BoT) for approval by the Federal Government.

The BoT, in its 133rd meeting held on July 11, 2024 approved the budget proposals for the year 2024-25 and the revised budget estimates for the year 2023-24 which approved expenditure for FY 2023-24 was Rs 80,037.502 million, revised budget Rs 61,951.193 million and budget estimate for FY 2024-25 Rs 78,005.48 million.

The total estimated receipts were Rs 115,972.114 million in FY 2023-24 which revised upward to Rs 128,584.048 million and estimated receipts of Rs 155, 085.680 million for FY 2024-25.

The MoPHRD further apprised that in order to comply with the provisions of Section 19(1)of the EOB Act, 1976 and Section 6(a) of the Employees’ Old Age Benefits (Board of Trustees)Rules, 1977, the Federal Cabinet may approve EOBI’s budget for the year 2024-25 and the revised budget estimates for 2023-24.

During the ensuing discussion, the forum expressed extreme displeasure over delayed presentation of the budget proposal for FY 2024-25 and proposal for approval of actuals of previous year’s budget (FY 2023-24).

The forum observed that it exhibited sheer indiscipline that the audit of the management accounts of EOBI by the concerned Chartered Accountant Firms had not been carried out since 2018-19. The forum directed that factual situation and reasons for not getting the audit be presented before the ECC.

The forum also directed that the Ministry of Overseas Pakistanis and Human Resources Development should develop a sustainable business plan for EOBI and present the same before the Rightsizing Committee and the Auditor General shall also be invited for the meeting to explain the audit status of the EOBI.

The ECC approved the summary to the extent of budget proposal for the FY 2024-25, with the displeasing concern that the proposal had been submitted at this belated stage without any plausible reason and which should be avoided in future.

The ECC while noting the actuals of budget 2023-24 of EOBI directed the Ministry of Overseas Pakistanis and Human Resources Development to ensure statutory audit of EOBI and apprise the ECC about the reasons for delaying it since 2018-19 in its next meeting.

The ECC also directed that Ministry of Overseas Pakistanis and Human Resources Development to present a sustainable business plan of EOBI to the Rightsizing Committee for consideration and the Auditor General also be invited for the meeting to apprise Committee about the audit status of EOBI of the last five years.

Copyright Business Recorder, 2025