There simply seems to be no good reason for the EOBI not to pay the pensions at the enhanced rate
KARACHI: The comprehensive report published in your newspaper titled “EOBI, finance ministry’s disagreement: pensioners await the twice-promised increase” (December 28) makes for shocking reading. It is really disgusting that in these days of galloping inflation, EOBI pensioners are forced to fend for themselves on a meagre pension of Rs3,600 per month which, in their advanced years, is insufficient to meet even their medical expenses. And what makes it even more shameful is the fact that the EOBI pensioners are being made to suffer, not due to some valid reason but just because of an ongoing tussle between the EOBI and the ministry of finance.
As reported, the PML-N government raised the minimum pension from Rs3,600 to Rs5,000 in 2013-14 and again to Rs6,000 in the June 2014 budget for the year 2014-15. However, despite these pleasing announcements, the hapless EOBI has continued to receive Rs3,600 of minimum pension because the finance minister’s announcements were not supposed to apply to EOBI pensioners. The additional cost of raising the pension from Rs3,600 to Rs6,000 as estimated by the EOBI management amounted to Rs5 billion per annum and it wanted the finance ministry to foot this bill, but the ministry refused to oblige, claiming that being an independent and self-sufficient body, the EOBI should foot the bill.
The disagreement between the federal and provincial governments over the minimum wage has also created complications because under the EOBI Act, employer and employee contributions by serving members is calculated at five per cent and one per cent of the minimum wage. According to the figures quoted in the report, for the EOBI income, expenditure, estimated surplus for the year and the total pension costs, the EOBI seems to have the capacity to pay the enhanced pension from its own sources. Moreover, it can also increase its income by slightly increasing the percentages of the employer and employee contributions or even by raising the threshold on which these percentages are applied. There simply seems to be no good reason for the EOBI not to pay the pensions at the enhanced rate. Finance Minister Ishaq Dar has now formed a committee, headed by himself and having as members Naseem Iqbal, a member of the EOBI board, to represent the employers and Yousuf Sarwar, another board member, to represent the employees. Let us hope the committee makes a favourable decision soon.
S R H Hashmi
Published in The Express Tribune, December 30th, 2014.
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