Employees' Old-Age Benefits Institution
Ministry of Labour Manpower & Overseas Pakistanis
Government of Pakistan
HEAD OFFICE, KARACHI
The Employees' Old-age
Benefits Act, 1976 has been amended through the Employees' Old-age
Benefits (Amendment) Ordinance, 2002. The salient features of the
amendments are as under:
In 1986 the widow pension was
replaced by survivor's pension. However the word "widow's" was not
substituted by the word "survivor's" in section 2(a). This
consequential change has been made for consistency, clarification
A new form (PR-10) has been
prescribed in clause (oa) through Rule 5(1).of the EOBI
(Contribution) Rules, 1976.
The Board of Trustees has been
empowered to co-opt any technical person as member on the Board, for
a specific purpose, and limited period as decided by the Board.
By virtue of second proviso to
Section 9 (1) no contribution was payable in respect of any person
who was in receipt of pension under the EOB Act. There were cases
where an insured person receiving the survivor's pension was also
working in insurable employment. The use of word blanket "pension"
was being misinterpreted by certain employers thereby stopping
contribution in respect those insured persons. Due to stoppage of
payment of contributions the right of such insured persons to
old-age pension as well as invalidity pension was being seriously
prejudiced. The anomaly has been rectified and the word "pension"
has been substituted by the word "survivor's pension". By this
amendment now the contributions are payable in respect of the
persons who are in receipt of the survivors pension and as such the
survivors pension holders can also fulfill the requirements to
qualify for old-age pension or invalidity pension, as the case may
be. However as provided by Section 28 such insured person would be
entitled for one benefit, which would be the higher.
In order to simplify calculation of
contribution for the Self-Assessment Scheme, a flat rate
contribution, irrespective of the wages, has been fixed @ Rs. 150/-
per person per month instead of 5% of the wages subject to maximum
of Rs. 5000/- per month.
The law has provided employees
contribution through Section 9B @ Rs. 20/- per month per person in
the prescribed manner w.e.f July 2001. As per EOBI (Contribution)
Rules, the employers have to deduct the contribution from the wages
of the insured persons. However in view of Sub-section (3) of
Section 9 read with clause (c) of Section 37 the employers were
reluctant to deduct the amount of contribution from the wages of the
employees. To facilitate the employers to deduct employee's share of
contribution an amendment in the law in Section 9 as well as Section
37 has been made whereby before the word "contribution" the words
"employer's share of " have been added making the phrase as
"employers' share of contribution". Now only the employer's share of
contribution can not been deducted; however there is no restriction
of deduction of employees' share of contribution.
It has now been provided that in
order to reduce compliance cost of employers and minimize collection
cost of the Institution the number of inspection for self-assessed
cases be restricted to one inspection by an officer not below the
rank of Deputy Director after two years and in regular scheme once
in a year, with 15 days prior notice, by at least an Assistant
An altogether new self-assessment
scheme has been introduced through insertion of a new Section 12A.
In accordance with sub-section (1) an employer may opt and apply for
self-assistant scheme by declaring the number of employees and their
prescribed particulars on form PR-10. The employers opting for
self-assessment scheme shall not decrease amount of contribution or
the number of insured persons during the period of two years. The
officials of the Institution shall not enquire into or inspect any
establishment which has opted for self-assessment scheme for a
period of two years from the date of submission of application.
After expiry of two years, if the employer wishes to continue of
self- assessment scheme, one time checking of record shall be done
by an officer not below the rank of Deputy Director.
The existing maximum time limit of
five years for actuarial valuation time period for actuarial
valuation is reduced from 5 years to 3 years. Further it is provided
that in future no change in pension scheme involving enhancement of
financial obligations shall be made without actuarial valuation and
provision of matching finances to meet the resource gap.
The word "payable" in:
(a) clause (b) of sub-section (1) of Section
have been substituted by the word "paid". The net
effect of this substitution would be that if the contribution is not
paid by the employer in respect of some insured persons; such
insured person would not be entitled for any benefit under this Act.
In addition to this by inserting provision in all of the above
Sections protection to the insured persons have been given in case
of any default for the period before 30/6/2002.
The word Chairman has now been substituted by the word President
in line with Section 7(1)(a) of the Act. The President of Pakistan
has been pleased to promulgate the Employees' Old-age Benefits
(Amendment) Ordinance, 2002 on 27/8/2002. A circular elaborating the
impact of said amendment Ordinance has been prepared which is place
for perusal and approval of the competent authority before issuance.
(Raja Faizul Hassan Faiz)