This presentation is about the EOBI Act as applicable in Pakistan. A part of labour laws. Law deals about old age benefits and invalidity pension.

1. Employees' Old-Age
Benefits Act, 1976
SYED MUHAMMAD IJAZ, FCA, LL.B.
PARTNER
HUZAIMA IKRAM & IJAZ

2. INDEX
CHAPTER – I
PRELIMINARY
1. Short title, extent, commencement and application.
2. Definition.

3. 1. Short Title, Extent, Commencement and Application.
 It extends to the whole of Pakistan .
 It shall come into force at once.
 It applies to every industry or establishment.
 Ten or more persons are employed-During preceding 12 months
 By or on behalf
 Even afterward the quantity reduces below ten this Act will continue to apply
 Voluntary application by industry or establishment even if employees are below the
minimum threshold
 Any other industry or establishment notified by FG
2. Definition
 In this Act, unless the context otherwise requires

4. INDEX CONTINUES
CHAPTER – II
INSURED PERSON
3. Compulsory Insurance.
4. Administration.
5. Nomination of a body corporate pending establishment of an Institution.
6. Management.
7. Board of Trustees
8. Powers and Functions of the Board of Trustees
8A. Appointment, Powers and Functions of Chairman

5. 3. Compulsory Insurance
 All employees in an industry or establishment shall be insured in the manner prescribed by or under this
Act
4. Administration
 At or after the start of this Act, FG shall nominate by notification An Institution called Old age Benefit
Institution (EOBI)
 Institution shall be;
 A Body corporate
 It can own property-Movable or immovable
 Shall have a perpetual succession and common seal
 Can sue and be sued in its name
5. Nomination of a Body Corporate Pending Establishment of An Institution
 Till the establishment of such Institution-FG by notification, can nominate a body corporate with such
powers as it may define from time to time

6. 6. Management
 Functions/powers to be exercised by the Board (Board of Trustees) viz to be assisted by a Chairman
 Federal government can guide Institution on policy matters
7. Board of Trustees
 The Secretary or Additional Secretary in the Labour Division, who shall also be the President of the Board of Trustees
 Four persons to represent the Federal Government- One each from ministry of finance and labour
 Four persons to represent the Provincial Governments, one to be nominated by each of the Provincial Government
 Four persons to represent employer,
 Four persons to represent insured person,
 One person to represent the Institution
 Representatives of employers and Insured persons to be chosen from lists of name submitted to FG (Recognized bodies only)
8. Powers and Functions of the Board of Trustees
 Approve the
 budget estimates,
 audited accounts and
 annual report of the Institution for submission to the Federal Government
 to co-opt any other technical person for a specific purpose and for such limited period as decided by the Board.

7. 8A. Appointment, Powers and Functions of Chairman
 Shall be appointed by the Federal Government for such term and on such terms and conditions as it may determine.
 Shall exercise such powers and perform such functions as may be prescribed

8. INDEX CONTINUES
CHAPTER – III
CONTRIBUTION
9. Rates and Assessment
9A. Contribution by Government.
9B. Contribution by the insured person
10. Records and Returns by Employers.
11. Registration of Establishment, Etc.
11A. Cancellation of Registration of Establishments etc.
12. Officials of Institution to Check Employer's Books.
13. Increase of Unpaid Contribution and Recovery of Contribution, etc., as arrears of land
revenue.
14. Safeguard of Insured Person’s Right in Default of Payment of Contributions by Employers.
15. Refund of Contributions Paid Erroneously
16. Extinguishment of Claims to Contributions

9. 9. Rates and Assessment.
 Employer’s Contribution; 6% of wages-for every insurable employee
 No Contribution for – Insured person (male) who has attained age of 60 years and in case of woman 55
years
 If wages are not paid- then the Institution shall determine the amount on which contribution is to be
paid
 Notwithstanding any contract- Employers are not allowed to deduct or otherwise recover contribution
from employees
9A. Contribution by Government
 Federal Government may make such contribution to the Institution as it may determined from time to
time.
9B. Contribution by the insured person
 On and from Ist day of July 2001, the contribution shall be payable by an insured person at the rate of
[one percent of the wages] in prescribed manners.

10. 10. Records and Returns by Employers
 Every employer shall keep such records and shall submit to the Institution such returns, at such times, in
such form, such particulars relating to persons employed by him, as may be provided in regulations.
11. Registration of Establishment, Etc
 Before the expiration of thirty days from the day on which this Act becomes applicable, communicate
to the Institution the name and other prescribed particulars of the industry or establishment. Every
insured person may also communicate his name and other prescribed particulars to the Institution.
 Under sub-section (1) or sub-section (2) the Institution shall register the name of the industry or
establishment & issue registration card in such from, as may be prescribed
11A. Cancellation of Registration of Establishments, Etc
 On the basis of such evidence as the Board may find satisfactory for the purpose, cancel the registration
of any establishment or industry which has ceased to exist, on cancellation of the registration industry
shall not affect its liabilities incurred before the date of cancellation

11. 12. Officials of Institution to Check Employer's Books
 Require an employer to furnish to him such information as he may consider necessary
 The official referred to in sub-section (1) shall not demand production of account book and other
documents referred to in clause (b) of sub-section (1) for a period of two years from the date of
registration or the 1st day of July, 2005, whichever is later
 On expiry of two years’ period, if the employer enhances the number of insured persons by at least ten
percent, it shall be accepted without any question otherwise checking of record shall be done as
provided in sub-section (1), by an officer not below the rank of Assistant Director
13. Increase of Unpaid Contribution and Recovery of Contribution, Etc., as arrears of land revenue
 If an employer fails to pay contribution on due date, the amount so payable by him shall be increased
by percentage as may be prescribed
 Without prejudice to any other remedy, the amount of contribution due, together with the increase
provided for under sub-section (1), may be recovered as an arrears of land revenue.

12. 14. Safeguard of Insured Person’s Right in Default of Payment of Contributions by Employers
 Section starts with a non-obstante clause referring to this Act.
 If an insured person has informed Institution in due course about his particulars
 That person being issued card by the Institute, changes employment and informs the institute of such change in due
course
 In case of default by employer, the insured shall have and will enjoy same rights as if no default has ever been
occurred.
15. Refund of Contributions Paid Erroneously
 Every Employer shall be entitle to refund of-
 An amount erroneously paid
 An amount paid in excess
 Only on application of refund within 6 months of the date of payment
16. Extinguishment of Claims to Contributions
 Any claims of the Institution for unpaid contributions shall be extinguished in the manner provided in the regulations.

13. INDEX CONTINUES
CHAPTER IV
FINANCE AND AUDIT
17. Employees' Old-Age Benefits Fund
18. Investments and Loans
19. Budget, Accounts and Audit
20. Annual Report
21. Valuation of Assets and Liabilities

14. 17. Employees' Old-Age Benefits Fund
 Institution shall have its own fund,
 to be called the Employees' Old-Age Benefits Fund
 Institute may incur out of fund necessary expenditure
 All contributions or moneys to be paid to the fund
 Sources of Revenue of Institution
 contribution payable,
 all other payments made by employer, and
 Income from Investments of the money of the Institution
 donations & bequests
 Assets of the Institute shall solely be utilized for the purposes of this Act
 All moneys of the fund to be deposited in banks as may be approved by the Board
18. Investments and Loans
 Invest any moneys which are not immediately required for expenses under this Act, and may re-invest or realize such
investment.
 With the previous sanction of the Federal Government and on such terms as it may specify, raise loans and take
measures for discharging such loans.

15. 19. Budget, Accounts and Audit
 Institute shall draw budget- Anticipated Revenue and Expenditure- Present it to Board for approval of FG
 Institute shall maintain account of Income and Expenditure in the manner prescribed which shall be balanced
on 30th June of every year
 Accounts shall be audited by auditors approved by FG at such time and in such manner as may be
prescribed by FG.
 Auditors shall have access to documents and records and they shall furnish their report to FG
20. Annual Report
 The Institution shall submit to the Federal Government an annual report of its work and activities.
21. Valuation of Assets and Liabilities
 At intervals of not more than three years, have an actuarial valuation made in the prescribed manner of its
assets and liabilities and no change in rate of contribution or benefit under this Act shall be made without
proper actuarial valuation.
 Provided that FG may direct valuation to be made at such other times as it may consider necessary

16. 22. Old-Age Pension
22-A Old-Age Grant
22-B Survivor’s Pension
INDEX CONTINUES
CHAPTER – V
BENEFITS

17. 22. Old-Age Pension
 An Insured person Shall entitled to a monthly old-age pension at the rate specified in the schedule. Provided that
 He is over sixty years of age, or
 fifty-five years in the case of a woman.
 Contributions in respect of him were paid for not less than fifteen years
 Age shall further be reduced by 5 years in case of person employed in mining
 Regular Payments by Insured person himself will not disentitle him of any benefit under this Act, even if the employer
defaults in its contributions
 An insured person already in receipt of an old-age or invalidity pension, or entitled to an old-age pension under the
provisions shall be entitled to a minimum pension at the rate specified in the Schedule.
 Person who retired from insurable employment before attaining the age of sixty years but after attaining the age of
fifty-five year shall be entitled to a reduced old-age pension on fulfilling through documentary evidence, employer
certifies
 The old-age pension shall be reduced by one half per cent of the Old-Age Pension specified in the Schedule for
each completed month by which the age falls short of sixty years

18. 22A. Old-Age Grant
 entitled to an old-age grant payable in a lump sum equal to his one month's average monthly wages
for every completed year of insurable employment or part thereof in excess of six months
 prior to 30th June 2002 in respect of said word "payable" the word "paid" were not substituted
 Employers default will not effect the entitlement if the Insured person himself pays his contributions
regularly
22B. Survivors' Pension
 In the case of the death while in insurable employment, had completed not less than thirty six months,
the surviving spouse, shall be entitled to a life pension equal to the minimum pension
 While not in insurable employment but after he had completed five years insurable employment, the
surviving spouse, if any, shall be entitled to a life pension equal to the minimum pension.
 Who had become entitled to old-age pension before his death, the surviving spouse, shall, if the
spouse had married the deceased person before he had attained the minimum age prescribed for
old-age pension, receive life pension equal to the pension of such person.
 In case of male child, until he attains 18 years of age or in case if female child, until she attains 18 years
of age or marriage, which ever is earlier

19. 23. Invalidity Pension
 An insured person who sustains invalidity shall be entitled to an invalidity pension at the rate to
be calculated according to the formula set out in the schedule
 Subject to regulations, the invalidity pension shall be payable from the month following that in
which the insured person satisfies the conditions for entitlement, invalidity pension shall be
payable so long as invalidity continue

20. INDEX CONTINUES
CHAPTER – VI
PROVISIONS COMMON TO ALL BENEFITS.
24. Calculation of Qualifying Contribution Periods.
25. Benefit Claims and Payments.
26. Extinguishment of Benefits.
27. Suspension of Old-Age Pension and Survivor's Pension.
28. Non-Duplication of Benefit.
29. Benefit nor Attachable, Chargeable Or Assignable.
30. Repayment of benefit improperly received.
31. Institution's Right to Be Indemnified in Certain Cases
32. Recovery of Amounts Due

21. 24. Calculation of Qualifying Contribution Periods
 For calculation of period of entitlement (60 yrs for mail and 55 yrs for female) following shall also be deemed to be the
contribution periods
 Period in respect of which invalidity pensions are paid
 Periods of maternity benefit in case of females
 Periods in respect of which benefit for injury or sick ness or total disablement is given under Social Security Ordinance
25. Benefit Claims and Payments
 Claims to be made in writing in the manner prescribed in regulations
 Payments to be made in the manner prescribed in regulations
26. Extinguishment of Benefits
 A right to any benefit shall stand extinguished where a claim therefore is not made within twelve months of the date on the
benefit becomes payable
 Institution may condone the delay and admit the claim if it is satisfied that the delay was caused for reasons beyond the
control of the insured person or the survivor
27. Suspension of Old-Age Pension and Survivor's Pension
 Payment to Insured person or survivor is to be suspended as long as he/she is absent from Pakistan Except
where regulations provide otherwise.

22. 28. Non-Duplication of Benefit
 Shall not be paid for the same period more than one of the benefits, person is entitled to more than on benefit, he shall
be given the higher of such benefits
 Person is entitled to a benefit under this Act & to a disablement pension under the West Pakistan Employees' Social
Security Ordinance, 1965, he shall be given the higher of the two.
 Shall not be payable to a person so long as he receives the sickness benefit under the West Pakistan Employees' Social
Security Ordinance, 1965
29. Benefit Not Attachable, Chargeable Or Assignable
 shall not be liable to attachment in the execution of a decree, nor shall it be chargeable or assignable
 any agreement to charge or assign a benefit shall be void, and on the bankruptcy of a person, the benefit payable to
him shall not pass to any trustee or person acting on behalf of his creditors.
30. Repayment of benefit Improperly Received
 When a person has received any benefit under this Act to which he is not lawfully entitled, he shall be liable to repay to
the Institution
 Sums due to the Institution by virtue of the foregoing sub-section may be recovered by deduction from a
benefit payable under this Act.
 Institute may waive recovery of a benefit if such recovery causes hardship and payment was made due to any
misinterpretation of any provision of this Act.

23. 31. Institution's Right to Be Indemnified in Certain Case
 Creating a legal liability in some person, the Institution shall be entitled to substitute itself for the insured
person in bringing a suit for damages against that person.
32. Recovery of Amounts Due.- Any amount recoverable under this chapter may be recovered as
an arrear of land revenue.

24. INDEX CONTINUES
CHAPTER – VII
DETERMINATION OF QUESTIONS AND CLAIMS
33. Decisions of Complaints, questions and disputes.
34. Review of decision
35. Appeal to Board.
36. Assessment of invalidity

25. 33. Decision on Complaints, Questions and Disputes
 Institute shall decide in matters pertaining to-
 Any complaint is received or any question or dispute arises as to, Whether a insured person, amount of wage,
amount of contribution, entitlement to any benefit, registration of industry or establishment
 Institution shall notify its decision to the person concerned in writing, stating therein the reason for its
decision.
34. Review of Decisions
 On new facts being brought to its notice, review a decision given by it under section 33.
 No decision shall be so reviewed without giving the person concerned an opportunity of being heard and
adducing evidence in support of, or against, the decision, as the case may be
35. Appeal to Board
 May appeal to the Board if the person is aggrieved by decision under s33 & s34
36. Assessment of Invalidity.
 The Institution shall appoint medical boards which shall, in such manner as may be provided by regulations,
assess the degree of invalidity sustained by an insured person.

26. INDEX CONTINUES
CHAPTER – VIII
OFFENCE AND PENALTIES.
37. Offences.
38. Prosecution.

27. 37. Offences
 For the purpose of obtaining benefit
 Knowingly-Makes false statement or false representation, fails to pay any contribution, fails or refuses to submit any
return
 Obstructs any official of the Institution in the discharge of his duties
 Shall be punished with imprisonment for a term which may extend to two years, or with fine which may
extend to ten thousand rupees, or with both.
38. Prosecution
 No prosecution shall be instituted except with the previous sanction of the Federal Government or any
office or authority
 No court inferior to that of a Magistrate of the first class shall try any offence under this Act.
 No court shall take cognizance of any offence under this Act except on a complaint

28. INDEX CONTINUES
CHAPTER IX
MISCELLANEOUS
39. Contributions etc
40. Exemption From Stamp Duty
41. Exemption From Taxes
42. Member and servants of the institution to be public servants
43. Delegation of Powers
44. Power to make Rules
45. Power to make Regulations
46. Power to exempt.
47. Act not to apply to certain persons.
48. Repealed Schedule

29. 39. Contributions Etc
 Any proceedings of insolvency against a person or proceedings for winding up of a company, any
contribution or other amount payable such person or company shall be deemed to be included among
debts to be paid in priority to all other debts
40. Exemption From Stamp Duty
 Stamp duty shall not be chargeable upon any documents used in connection with benefits payable under
this Act.
41. Exemption From Taxes
 Notwithstanding anything contained in any other law, FG by order in writing, exempt the Institution from any
tax, duty, or rate leviable by the Federal Government or by a local authority under the control of the
Federal Government
42. Member and Servants of the Institution to Be Public Servants
 Members and employees of the Board and all officers and servants of the Institution shall be deemed to be
public servants within the meaning of section 21 of the Pakistan Penal Code
43. Delegation of Powers
 Board may direct that all or any of its powers and functions may, as may be specified, be also exercisable
by any officer or authority subordinate to the institution.

30. 44. Power to Make Rules
 The Federal Government may, subject to the condition of previous publication in the official Gazette, make rules to carry
out the purposes of this Act
 In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the
following matters
 Tenure of members of Board (other than president) and other terms and conditions, rules, quorum and numbers of members
 Mode and manner of appointment of members of board
 Fee and benefits of the members of Board
 Time, rates and manner of contributions
 Time, rate and manners of arrears of contributions
 Investment of surplus funds, realization of investments and reinvestment
 Mode and manner of budget of the Institute
 Forms of accounts of the Institute
 Time and how such accounts be audited
 Matters to be included in annual report
 Time in which claims of benefits are to be made
 Manner and procedure for disposal of appeals
 Any other mater which is required or as may be prescribed

31. 45. Power to Make Regulations
 The Board may, subject to condition of previous publication, by notification in the official Gazette, make
regulations not inconsistent with the provisions of this Act or the rules.
 In particular, and without prejudice to the generality of the foregoing power, such regulations may provide for all
or any
 Time place and manner of meeting of Board
 Determination of contribution of wages for calculation of contribution payable
 Records to be kept and returns to be submitted by the employers
 Manner and mode in which unpaid contributions may be extinguished
 Powers and duties of Internal auditors
 Forms of claims and documents to accompany them
 Manner, mode and time & place of payment in respect of benefit
 Manner and mode and time in which appeals are to be decided
 Manner and mode of review
 Method of payment of contribution and liability thereof

32.  Manner and mode of assessment of invalidity
 Proof of age for the purposes of this Act
 Manner in which services of the Institute shall be organized
 Any other matter not provided for under this Act or rules made under this Act
46. Power of Exempt
 The Federal Government may, subject to such conditions as it thinks fit to impose, by
notification in the official Gazette, exempt any establishment or industry from all or any of the
provisions of this Act.

33. 47. Act Not to Apply to Certain Persons
 Persons in the service of the state, including members of the armed forces, police force and railway servants, local
council, a municipal committee, a cantonment board or any other local authority
 Service of Water & Power Development Authority, service of a bank or a banking company etc
48. Repealed
 Repealed by Ord. XXVII of1981,s.3 & 2nd Schedule.
 SCHEDULE
 Monthly rate of old-age pension formula :- Avg monthly wages x No. of years of employment
 Six months period shall be treated as one full year
 No account shall be taken of period after one becomes entitled to OAP
 Average monthly wages shall be calculated on 12 calendar months immediately after fulfilling the conditions specified in sec 23
 Old-age pension shall or invalidity pension, shall not be less than one thousand rupees per month commencing or after the first
day on January, 2005.