From January 1, 2025, pensioners to receive higher payouts under the Employees’ Old-Age Benefits Institution following cabinet nod
Islamabad, July 16, 2025 — In a notable development during a session chaired by Prime Minister Shehbaz Sharif, the Federal Cabinet approved a 15% increase in EOBI pensions, effective retroactively from January 1, 2025. The decision, a major relief for pensioners, reflects the government’s ongoing commitment to strengthening social welfare programs as the country navigates economic and political challenges.
The adjustments include an increase in the minimum EOBI pension from Rs 10,000 to Rs 11,500, a 15% rise for pensions exceeding Rs 10,000, and the move aligns with a series of reforms aimed at enhancing financial support for retired workers .
Context and Rationale
This move follows a briefing with Federal Minister for Overseas Pakistanis Salik Hussain, during which it was highlighted that EOBI revenue surged by 40% in FY 2024–25, reaching Rs 116 billion . The revenue increase was attributed to improved contribution collection efforts and expanded institutional coverage.
EOBI Reforms and Anti-Fraud Measures
In parallel, the Public Accounts Committee (PAC) exposed Rs 2.79 billion in pension paid to ineligible recipients. In response, EOBI plans to verify eligibility using NADRA-linked CNIC records, eliminating older manual checks and tightened oversight to exclude fraudulent claims .
Expanding Eligibility Coverage
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Looking ahead, EOBI plans to widen its safety net by extending coverage to employees in institutions with fewer than 10 workers, as well as those in agriculture, domestic work, finance, and legal services . This expansion seeks to benefit underrepresented segments in the labor market and increase social security inclusivity.
Financial Implications and Next Steps
The implementation of the pension increase will channel approximately Rs 10 billion into the economy through higher pension disbursements to some 400,000–500,000 pensioners . The formal announcement is anticipated on May 1, 2025 (Labour Day), marking a symbolic gesture toward workers and retirees .
Impact and Significance
This pension hike marks one of the most substantive social safety expansions by the provincial and federal governments in recent years. By easing financial burdens on retirees—particularly amidst rising inflation—the government aims to foster greater economic stability and public trust in state institutions.