During my years in banking, I became familiar with a distinction that rarely appeared in public discussions about employment. People could work in the same building and follow similar office routines, yet belong to different employers. Some held permanent positions. Others worked through staffing contractors. Retirement benefits depended not only on the work someone performed but on the legal relationship under which that person had been hired.

A permanent employee might qualify for an employer-sponsored retirement scheme. An outsourced worker would need to look to the benefits provided by the legal employer and applicable law. Neither arrangement automatically determines EOBI eligibility. Statutory social insurance and occupational retirement benefits are separate questions.

Pakistan’s retirement debate devotes considerable attention to government pensions. The position of private-sector workers receives less sustained scrutiny. The problem affects not only people who receive no pension but also those whose EOBI benefits fall far short of household expenses.

What Can Rs 11,500 Buy After Retirement?

In August 2025, the National Assembly’s Standing Committee on Overseas Pakistanis and Human Resource Development confirmed that the minimum EOBI pension had risen from Rs 10,000 to Rs 11,500 per month, effective January 1, 2025. A further increase was being considered in August 2026, subject to actuarial assessment. I could not verify a newer officially notified minimum as of October 15, 2026.

The 15% increase offered some relief. Yet Rs 11,500 would cover only 23% of an illustrative Rs 50,000 monthly household budget, leaving a Rs 38,500 shortfall. That budget is not a national average: housing arrangements and medical expenses vary sharply. It shows why a pension increase measured in percentages can still leave a retiree without enough rupees to live on.

Why Does EOBI Provide Such Limited Income?

The Employees’ Old-Age Benefits Act, 1976, established a social insurance scheme for eligible workers. Under the contribution arrangement described in Pakistan’s Economic Survey, covered employers contribute 5% of the applicable minimum wage and employees 1%. The contribution base is not necessarily the worker’s full actual salary. EOBI is therefore not designed to replace the wages of every insured worker at retirement.

Higher pensions require sustainable contributions, investment income or another source of funding. The Pakistan Economic Survey 2024–25 says regular government contributions ceased in 1995. Reform must confront that financing choice. Increasing pensions without identifying revenue could weaken the fund; maintaining benefits that are inadequate for essential expenditure leaves pensioners exposed.

Who Remains Outside Protection?

Pakistan’s Labour Force Survey 2024–25 reported that 72.5% of employment was in the informal sector. That is not a measurement of the proportion of workers without pensions. It nevertheless shows why a system built around registered establishments cannot automatically reach much of the workforce. Domestic workers, agricultural labourers and self-employed people may have no regular EOBI contribution history.

Some workers fall outside the statutory scheme. Others may work for employers who are legally required to register eligible employees but fail to do so. Expanding coverage and enforcing existing obligations are different tasks. Reliable records and a workable means of collecting contributions are needed for both.

Outsourcing and Retirement Rights

Outsourcing does not automatically extinguish statutory rights. In banking and other industries, a person may work for years inside a host organisation while receiving wages from a staffing company. The actual employment relationship, legal classification and relevant legislation determine the worker’s entitlements. It would be wrong to assume that every outsourced worker qualifies for the host organisation’s voluntary pension plan.

In Sindh, the Terms of Employment (Standing Orders) Act, 2015, governs specified workplaces and workers. Its gratuity and provident-fund provisions are subject to statutory conditions; an employee cannot assume an automatic entitlement to both. EOBI registration and contribution obligations must be examined separately. Workers should obtain contribution histories before retirement, particularly when staffing contractors change.

Why Has Government Reform Been So Slow?

Successive governments have not done nothing. They established EOBI, required contributions and periodically raised benefits. Yet the system still does not provide adequate old-age income across Pakistan’s workforce. Raising employer contributions increases costs for covered businesses. Funding pensions through taxation competes with other budget demands. Bringing informal workers into the system requires registration and enforcement capacity that the state has struggled to build.

These are real obstacles, but they also reflect political choices. Employers have established associations through which to argue against higher costs. Retirees and workers approaching retirement may have less influence. That imbalance merits further investigation rather than an unsupported allegation that any particular group deliberately blocked reform.

On October 1, 2026, a federal cabinet committee reviewed pension models for excluded workers, including a voluntary arrangement for domestic and agricultural workers and self-employed people. It discussed digital registration and contribution mechanisms. The government announcement described proposals under review, not a fully operational nationwide pension scheme. Voluntary saving alone may do little for workers whose wages leave no money to spare.

What Does the Constitution Require?

Article 38(c) of Pakistan’s Constitution directs the state to provide social security through compulsory insurance or other means. Article 38(d) addresses basic necessities for citizens unable to earn a livelihood in specified circumstances. These are Principles of Policy, not an automatic enforceable right to a particular pension amount. Article 30 limits their judicial enforceability. Their presence nonetheless makes old-age protection an established constitutional policy objective.

Can Gratuity or Savings Fill the Gap?

A provident fund or gratuity can provide a useful lump sum, depending on employment terms and the law. But a lump sum is not a lifelong monthly pension. A retiree with Rs 2 million who must draw Rs 50,000 each month beyond other income would exhaust the principal in forty months, ignoring returns, inflation and unexpected expenses. Medical costs could shorten that period substantially.

What Would Serious Reform Require?

The Ministry of Overseas Pakistanis and Human Resource Development and EOBI should publish regular pension-adequacy assessments, drawing on household expenditure research and identifying the needs of older households. Actuarial reports should make the funding assumptions behind proposed increases understandable to the public.

Workers should be able to verify contribution histories throughout employment, including after moving between employers. Regulators should enforce existing registration duties. For low-income people unable to accumulate meaningful contributions, policymakers should examine a publicly supported minimum old-age benefit, with transparent eligibility rules and cost estimates. Such a programme would require fiscal choices rather than another announcement.

What Can Workers Do Now?

Before retirement, workers should check EOBI registration and recorded contribution periods, request written statements of provident fund or gratuity entitlements, and retain appointment letters and salary records. Outsourced workers should identify their legal employer. They should also find out whether medical insurance will end with employment. These precautions cannot replace adequate wages or a sound pension system, but they may prevent avoidable loss of benefits.

Fifty Years Is Long Enough to Recognise the Problem

EOBI remains an important institution, but its confirmed minimum pension is inadequate for many ordinary retirement budgets, and large parts of the workforce lack effective contributory coverage. The government has discussed expansion and financial reform. It must now decide what minimum standard of old-age protection it intends to provide, how that standard will be financed and which institution will be accountable for delivery.

Sources

National Assembly, August 2025 EOBI pension confirmation; Pakistan Economic Survey 2024–25, Social Protection; Pakistan Economic Survey 2025–26; Government of Pakistan, October 2026 pension reform committee; Sindh Terms of Employment (Standing Orders) Act, 2015.

Related reading

The Hidden Financial Crisis Facing Pakistan’s Retired Middle Class.