Employees’ Old-Age Benefits Act
🧾 Employees’ Old-Age
Benefits Act, 1976 – Part II
For Business, HR & Law Students
9.1 Employees’ Old-Age Benefits Institution (EOBI),
Certificate of Registration, Proof of Age, Contribution Payment & Employer
Liability
✅ Employees’ Old-Age Benefits
Institution (EOBI)
Definition: A government institution created to
manage and administer retirement benefits for employees of industrial and
commercial organizations.
Functions:
- Collecting
contributions
- Maintaining
insured persons’ data
- Disbursing
pensions and grants
- Managing
the EOBI fund
Example: EOBI manages pension disbursements to over
400,000 pensioners in Pakistan.
✅ Certificate of Registration
- Every
employer must register with EOBI.
- Upon
registration, the institution issues a Certificate of Registration
to the business.
- It
includes business details and employer number.
Importance: Proof of compliance with the EOBI law.
✅ Proof of Age
Required for Pension Eligibility
- CNIC
(Computerized National Identity Card)
- Birth
Certificate
- EOBI-issued
Insured Person Card
✅ Payment of Contributions
- Employers
contribute 5% of minimum wages.
- Employees
contribute 1% of minimum wages.
- Payments
are due monthly.
✅ Liability of Employer
- Employer
is responsible for:
- Registering
employees
- Deducting
and depositing contributions
- Keeping
contribution records
- Failure
to comply may result in fines and penalties.
9.2 Offenses and Penalties
✅ Offenses under the Act
- Failure
to register with EOBI
- Non-payment
or underpayment of contributions
- False
statements or fraud
- Obstructing
EOBI officers from inspection
✅ Penalties
- Fine
up to Rs. 50,000 or imprisonment up to 1 year
- Recovery
of unpaid contributions with penalty
- Legal
action through labor courts
Example: A factory that fails to deposit employee
contributions for 6 months may be fined and ordered to pay arrears with
interest.
9.3 Finance and Audit
✅ Finance
- EOBI
maintains a central fund.
- Income
sources include:
- Contributions
- Investment
income
- Government
grants
Use of Funds:
- Pension
payments
- Administrative
expenses
- Investment
in secure securities
✅ Audit
- EOBI
is audited annually by government auditors.
- Transparency
ensures credibility and security of funds.
Example: Annual audit reports are reviewed by the
Board of Trustees and sent to the Ministry of Overseas Pakistanis and Human
Resource Development.
9.4 EOBI Benefits Explained
✅ Types of Benefits under EOBI
|
Type of Benefit |
Conditions |
Example |
|
Old-Age Pension |
15 years of contributions, retirement at 60 (men), 55
(women) |
A worker with 17 years of contributions retires and gets
Rs. 10,000/month |
|
Old-Age Grant |
Less than 15 years of contribution |
A worker with 8 years of contribution receives a one-time
lump sum |
|
Survivor/Widow’s Pension |
Family pension after insured worker's death |
Widow of a deceased worker receives monthly pension |
|
Invalidity Pension |
Worker becomes permanently disabled |
A factory worker paralyzed in accident receives monthly
pension |
✅ Benefit Claims &
Extinguishment
- Claims
must be filed with supporting documents (CNIC, contribution history,
medical report, death certificate).
- Time
Limits: Generally 3 years from the date of eligibility.
- Extinguishment:
If not claimed within the specified time, the right may be extinguished.
🧠 Business Student
Relevance & Advantages
|
Area |
Benefits for Students |
|
HR Management |
Understanding legal compliance for employee retirement
benefits |
|
Corporate Law |
Awareness of employer liability and EOBI regulations |
|
Public Policy |
Insight into social security frameworks and government
programs |
|
Finance & Payroll |
Accurate wage and contribution calculation |
|
CSR & Governance |
Helps in developing employee welfare policies and
compliance strategies |
✅ Conclusion
The Employees’ Old-Age Benefits Act, 1976 protects the rights of employees and ensures financial security post-retirement. For business students, especially those entering HR, accounting, and compliance roles, understanding these provisions is crucial for maintaining ethical and legal business operations.
