MUCH to the relief of pensioners, the government has announced an increase of 46pc in their monthly payments through the Employees Old-Age Benefit Institute. The increase will take effect immediately.

The last time pensions for retirees of private-sector organisations were raised was in 2012 — by a nominal 24pc. Since then, subsequent governments have promised a raise in their budget announcements but failed to deliver.

Even this time, the increase was announced in the last budget but it took the government almost 10 months to deliver.

Take a look: EOBI raises minimum pension to Rs5,250

Delays notwithstanding, the step is good news for a segment of the population whose lifelong contribution to the country tends to be largely forgotten by policymakers. It should be followed up by another pledge of further increase in the forthcoming budget.

The announcement was accompanied by a promise to make public a study on how the EOBI can be strengthened. This is also good news considering that the organisation has just emerged from the shadow of a damaging scandal.

There are a few other steps that also need to be taken for the benefit of retirees. One is to find a way to limit the participation of large institutional investors in national savings schemes, a preferred destination for the life savings of senior citizens who are desperate for a healthy and stable return to be able to meet their expenses in their twilight years.

Large investors bring some benefit to the NSS, but they also make the returns subject to market volatility.

Currently, senior citizens do enjoy some immunity from the declining interest rates in the country, but new arrivals into the scheme are finding it hard to avail themselves of this stability.

Second, there should be the option of transferring payouts under NSS and the EOBI electronically into people’s bank accounts, rather than making pensioners collect their cheques from the nearest office.

With all the pressing priorities that weigh down our policymakers, it is important that senior citizens and retirees are not forgotten.

Published in Dawn, April 28th, 2015

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