ISLAMABAD, Dec 8: A large section of the country’s population has not been paid pension or old-age benefits, says the Pakistan Human Condition Report 2002.

The report said, with the passage of time, the burden of pension liabilities both compulsory, state-run and company-run had widened due to upward adjustments in the retirement benefits and longevity of life.

The report mentioned that an amount of Rs948 million were disbursed among 202,707 people during the year 2001-02 on account of payment of pension to the registered employers through Employees Old-age Benefits Institution (EOBI).

Out of this Rs948 million, Rs747 million was paid as payment of old-age pension among 141,330 beneficiaries, Rs187 million as survivors pension among 52,782 people, Rs8 million as invalidity pension among 4825 and Rs6 million as old age grant among 3,770 people.

The report said registered employers (an establishment having 10 or more employees) upto March 2002 were around 43,000.

The number of insured persons registered by end of March 2002 was around 1.5 million and it covered all employees in registered establishment employing 10 or more workers with eligible wages to a maximum of Rs3,000 per month.

All government employees and their dependents are entitled to life pension, widow pension, commutation of a portion of pension and free medical care.

A small number of employees of registered industrial establishment or a commercial establishment have been covered under the EOBI scheme introduced in July 1976 that become effective from 1979. The scheme covers formal sector establishments registered with the institution.

The EOBI is funded by an employer contribution of five per cent of wages and a limited federal contribution to provide monetary benefits to its insured persons in their old-age if they become disabled due to injuries or disease.

The survivor pension was also provided in the event of the death of an insured person to the widow /widower for life. The EOBI pension has a minimum amount (currently Rs630 per month) while the entitlements are related to the length of service (average monthly wages multiplied by number of years of eligible service divided by 500).

The human condition report suggested to reform the entire system by switching over to defined contribution retirement plans, which were run either by the EOBI or by insurance companies or specialized private retirement pension management companies, subject to government regulation.

However, it mentions that the poverty reduction strategy proposes to expand the coverage of pension schemes to a larger portion of the population by extending it to the wide population including domestic servants and rural workers and increasing the eligible wage limit.