KARACHI, Jan 27: The Employees Old Age Benefits Institution (EOBI) has collected less contribution at Rs1,195 million during first half of the current fiscal year compared to Rs1,297 million the same period last year.
Similarly, registration of employers with the EOBI stood lesser at 600 and there was also a decline in the number of insured persons to 58,960 compared to 84,411 insured in the corresponding period of last year.
EOBI Chairman Mohammad Shafi Malik addressing the Zonal Advisory Committee (Karachi Chapter) on Thursday said that major issues should be resolved with the consensus of the stakeholders to further promote institutionalized participative management in the EOBI.
He said that the major reasons for decrease in registration of employers were saturation level achieved by map-survey and the condition of simultaneous registration of insured persons for the purpose of record keeping.
After adjustment of recovery of arrears from PRTC and OGDC in preceding year, current collection of contribution up to January 26, 2005, has increased by 8.24 per cent.
Mr Malik said that the zonal heads of Karachi - north and south zones - have been directed to contact the employers association to get their support for registration and getting the names of the insured persons to complete the database of employers and employees.
The participants were informed that the EOBI had adopted the accrual accounting system from July 2004. He said that the record of insured persons was a prerequisite for debiting employers account for which the EOBI was not getting the desired response from them.
He solicited the cooperation of the members of the Central Advisory Committee to advise their members to provide the information for the mutual benefit of EOBI, employers and employees.
He informed that encouraged by the response of central advisory committee zonal chapters had been setup to complete the network of consultative process throughout the country.
He said that President Pervez Musharraf had announced increase of minimum pension to Rs1,000 per month. However, as per EOBI Act, minimum pension could be enhanced after actuarial valuation.
The actuaries had suggested three alternatives. Under the first alternative employer's contribution has to be raised to Rs300 per month from Rs150 and employees' contribution to Rs50 per month from Rs20.
Under the proposed scheme, the basic pension for the first 15 years service will be Rs1,000 per month. Additional pension for each year's service in excess of 15 years will be Rs25 per month.
The proposed scheme will also have grand fathering clauses to protect accrued benefits to ensure that no diminution in benefit is caused to an insured person entitled to benefits on the date of implementation of the amendment.
Under the second alternative the increase in contribution has been spread over five years. The employers' share of contribution shall have to be raised to Rs200 and the employees' contribution to Rs30 per month. The contribution from them will gradually be raised to Rs400 and Rs70 per month in the year 2008-09.
Under the proposed scheme, the basic pension for the first 15 years service will be Rs1,000 per month which shall be increased to Rs1,050 in 2007-08 and Rs1,100 in 2008-09. Additional pension for each year's service in excess of 15 years will be Rs25 per month. The proposed scheme will also have grandfathering clauses to protect accrued benefits.
Under the third alternative, the increase in contribution has been spread over 10 years. The employers and employees' share of contribution would be raised to Rs165 and Rs25 per month which would gradually be raised to Rs570 and Rs50 per month, respectively, in the year 2013-14.
Under the proposed scheme, the basic pension for the first 15 years service shall be Rs1,000 per month which shall be gradually increase to Rs1,250 in the year 2013-04.
Additional pension for each year's service in excess of 15 years will be Rs25 per month until 2007-08 and will be raised to Rs30 and Rs35 in 2008-09 and 2012-13 respectively. The proposed scheme will also have grand fathering clauses to protect accrued benefits.
The EOBI chairman invited the views of the participants. The employees' representatives supported the third alternative which would have progressive increase in contribution and pension to make the scheme viable in long range.
However, the employers' representatives proposed that the government should revive its contribution to restore the viability of the EOBI scheme and no further burden be placed on employers in view of increasing competition under WTO regime.