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:

1.  Substitution of word "Survivors' Pension" for "Widows' Pension" Amendments in Clause (a) of  Section 2.

     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 and correction.

2.  Form for Self Assessment Scheme - Amendments in Section 2.

     A new form (PR-10) has been prescribed in clause (oa) through Rule 5(1).of the EOBI (Contribution) Rules, 1976.

3. Powers to Co-opt Technocrat as member BOT - Amendment in Section 8.

     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.

4.  Provision for Payment of Contribution in Respect of Survivors' Pension Holder  Amendments in Section 9.

     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.

5. Reduction in Contribution for Self-Assessment Scheme - Amendments in Section 9.

     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.

6. Elimination of Legal Bar for Deduction of Employees' Share of Contribution Amendments in Section 9 &    Section 37.

     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.

7. Inspection to be Carried Out By an Officer of the Institution Not Below the Rank of Assistant Director in normal cases and Deputy Director in Self-Assessment Cases - Amendments in Section 12.

     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 Director.

8.   Bar on Decrease in Payment of Contribution by Employers who have Opted for the Self-Assessment Scheme

     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.

9. Actuarial Valuation After Every 3 years - Amendments in Section 21.

     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.

10. Substitution of word "payable" by the word "paid" and Safe Guard For Already Insured Persons - Amendments in Section 22, 22A, 22B and 23.

The word "payable" in:

(a)   clause (b) of sub-section (1) of Section 22,
(b)   clause (c) of sub-section (2C),
(c)   clause (a) of Section 23, and
(d)   clause (b) of Section 23

   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.

11. Substitution of word "Chairman" for the word "President" - Amendments in Section 44.

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)

                                                                                                                    Director (Law)