RECENT reports in parts of the national media have highlighted that the Emp-loyees’ Old-Age Benefit Institution (EOBI) has introduced a new pension system — the first major reform in its 40-year history. Under this formula-based system, pensions will be determined on the basis of contribution amounts and service duration, with the maximum pension set at Rs30,000 per month.

While this initiative may seem prog-ressive, it primarily benefits future retirees — those retiring after 2026 — and disregards the financial struggles of over 500,000 existing pensioners who continue to receive a meagre amount of Rs10,000. With the rising cost of living, this amount is grossly inadequate to sustain even a basic standard of living.

More importantly, the Rs30,000 pension cap raises serious legal and ethical concerns. The EOBI Act, 1976, guarantees pensions based on total contributions, without arbitrary limits. Section 37 of the Act explicitly states that pension entitlements cannot be altered without legal amendments.

By capping pensions, EOBI is dis-regarding the rightful claims of workers who have contributed significantly throughout their careers.

As such, the EOBI Pensioners Welfare Association (EPWA), labour unions and pensioners are rightfully demanding an increase in the minimum pension to match the country’s minimum wage regulations. Any attempt to divert attention from this legitimate demand is unjust as well as unacceptable.

If left unresolved, the issue may well trigger legal action or mass protests, as workers and pensioners fight for fair, inflation-adjusted pensions. Pensioners are not seeking charity; they are demanding what is rightfully theirs under the law.

Azfar Shamim
Karachi

Published in Dawn, May 24th, 2025