THIS is with reference to Syed Abu Riaz's letters (Aug 28 and Sept 1) regarding increase in EOBI pension.

It may be appreciated that the Employees Old Age Benefit Institution (EOBI) generates its funds through contributions from registered employers and employees (insured persons) to meet its pension liabilities.

Accordingly, the viability of the Institution's fund and its ability to enhance benefits totally depends on timely payment of contributions by the employers and employees and its profitable investment in high-yielding securities and stocks.

As a result of optimum level of fund management, the EOBI has been able to bring about major enhances of benefits from 1986 to 2008.

The minimum monthly pension has been increased from Rs306 in the year 1986-87 to Rs2000 in 2008. Formula pension depending upon the length of insurable employment has also been increased by 15 per cent and at present pensioners are drawing formula pension amounting to over Rs4,000 a month.

Actuarial valuation of the EOBI funds is carried out after every three years and any increase in pension is done after meticulous valuation of funds availability. The actuaries of the Institution are of the opinion that to enhance the viability of the scheme contribution rates have to be increased gradually to 21 per cent of the wages by 2028 to match the current benefit levels.

As such, we are not in a position to immediately increase pension without consulting our actuaries. However, a committee of members of the board of trustees of the Institution has been constituted to consider possibility of further increase in pension, which will submit its report to the government shortly.

JAVED IQBAL
Deputy Director-General,
EOBI