ECC urges EOBI to submit sustainable business plan to Rightsizing Committee

The Economic Coordination Committee (ECC) has instructed the Ministry of Overseas Pakistanis and Human Resources Development (MoPHRD) to develop a sustainable business plan for the Employees’ Old-Age Benefits Institution (EOBI) and present it to the Rightsizing Committee for consideration. 

The ECC also expressed dissatisfaction over delays in auditing EOBI accounts since 2018-19 and directed that the Auditor General be invited to address these issues.

During the ECC meeting, the MoPHRD briefed members about its role in managing social security, pensions, and welfare for private-sector employees. 

The EOBI, established under the Employees’ Old-Age Benefits (EOB) Act, 1976, was created to provide pension benefits to private-sector workers. Its core responsibilities include registering industries and employees, collecting contributions, disbursing pensions, resolving grievances, and managing funds.

The ministry revealed that EOBI benefits have been extended to approximately 435,000 insured persons, including pensioners and their survivors. The minimum pension was increased from Rs8,500 to Rs10,000 in August 2023. 

Additionally, EOBI achieved notable growth in financial contributions, rising from Rs31.5 billion in 2021-22 to Rs60 billion in 2023-24. Investment income also increased, with total receipts growing from Rs71 billion in 2021-22 to Rs128.6 billion in 2023-24.

Pension disbursements rose from Rs46.4 billion in 2021-22 to Rs57.1 billion in 2023-24, with the number of pensioners increasing from 396,878 to 424,750 over the same period. 

However, the 11th Actuarial Valuation Report of EOBI highlighted concerns, projecting that while contributions are expected to grow annually by 10.22%, rising pension disbursements could lead to a deficit of Rs237 billion by 2036-37.

The MoPHRD presented EOBI’s budget for FY 2024-25, which included estimated receipts of Rs155 billion and proposed expenditures of Rs78 billion. The ECC approved the budget proposal but criticized the delayed submission and lack of timely audits, calling it “sheer indiscipline.”

The ECC instructed the ministry to ensure statutory audits of EOBI accounts, addressing the reasons for the delay since 2018-19, and report back at the next meeting. Furthermore, it emphasized the need for the ministry to craft a sustainable financial plan to address the projected deficit and rising pension obligations.

The ECC also directed that the Auditor General be invited to the Rightsizing Committee meeting to discuss the audit status of the past five years.