Your Father Worked 18 Years in a Factory. Can He Get a Pension?
Say your father worked in a factory for 18 years. He turned 60 last month. A neighbour told him he can get a monthly pension from something called EOBI. Is that real?
Yes, it is real. EOBI stands for the Employees' Old-Age Benefits Institution. It is Pakistan's pension scheme for private sector workers. The law behind it is the Employees' Old-Age Benefits Act 1976. It covers the whole country and has been running since 1 April 1976.
This post explains who qualifies, how much the pension is, and how to claim it. Every figure here comes from the Act itself or from EOBI's official site.
Which Workers Does EOBI Cover?
The Act applies to every industry or establishment where 5 or more people are employed. That includes factories, shops, mines, road transport and construction firms. If a workplace once had 5 or more workers, the Act keeps applying even if the number later drops below 5.
Some people are outside the scheme. Section 47 of the Act excludes government servants, armed forces, police, railway staff, local council workers and WAPDA employees. They have their own pension systems. The employer's own family members are also excluded.
Every covered employee must be insured. The employer has to register the establishment and the workers with EOBI within 30 days of the Act applying. The worker gets a registration card.
Who Pays the Contributions?
The employer pays 5% of wages to EOBI each month. The worker pays 1% of wages. That 1% share was added from 1 July 2001 under section 9B of the Act.
Important: the employer cannot take his 5% share out of your wages. Section 9(3) says the employer shall not deduct his share from a worker's pay.
The contribution is calculated on the minimum wage, not your full salary. In 2026 the federal minimum wage is Rs 40,700 a month. So a worker on that wage pays about Rs 407 a month and the employer pays about Rs 2,035. You can read more about minimum wage rules in Pakistan in our separate guide.
One more protection exists. Section 14 says that if the employer fails to pay contributions, a registered worker does not lose his rights. The law treats the worker as if the contributions were paid.
Old-Age Pension: Who Qualifies?
You get the old-age pension when two things are true. You have reached the pension age, and you have enough years of insurable employment.
The pension age is 60 for men and 55 for women. Miners get it at 55 if they worked in mining for at least 10 years before retirement.
The contribution requirement is 15 years. Section 22(1) says contributions must have been paid for not less than 15 years. A year of insurable employment means 365 days on which contributions were payable.
Can you retire earlier? Yes, in a limited way. If your employer has a fixed retirement age below 60, you can take a reduced pension from age 55 (50 for women). The pension is cut by half a percent for each month you retire early, and that reduction stays for life.
How Much Is the EOBI Pension?
The Act's Schedule gives the formula. The monthly pension is 2% of your monthly wages multiplied by your years of insurable employment.
Example: a worker on Rs 40,700 wages with 20 years of insurable employment gets 2% times 40,700 times 20. That is Rs 16,280 a month.
There is a floor. The pension cannot go below the minimum fixed by the government. The minimum pension was raised to Rs 11,500 a month from January 2025. So even a low earner with 15 years gets at least Rs 11,500. In 2025 the government also approved a 15% increase for formula-based pensioners.
In April 2026 EOBI announced new pension rules. They introduce a baseline pension method and a review of pensions every three years.
What If You Don't Have 15 Years?
If you have less than 15 years but at least 2 years of insurable employment, you do not get a pension. You get an old-age grant. Section 22A of the Act says the grant is a lump sum equal to one month's average wages for every completed year of insurable employment. So 5 years of work means about 5 months of wages, paid once.
Survivor's Pension: What Happens After Death?
If a worker dies while in insurable employment after completing at least 36 months, the surviving spouse gets a life pension. This is the survivor's pension under section 22B.
If the worker died after leaving employment, the spouse still qualifies if the worker had completed 5 years of insurable employment. If a pensioner dies, the spouse gets the same pension the worker was receiving, provided the marriage happened before the worker reached pension age.
When the spouse also dies, minor children get the pension in equal shares. A son gets it until he is 18. A daughter gets it until 18 or marriage, whichever comes first. If there is no spouse or child, the worker's parents get the pension for 5 years.
Invalidity Pension: If You Become Permanently Disabled
A worker who becomes permanently unable to earn more than one third of normal earnings can get an invalidity pension. Section 23 of the Act sets the conditions.
The worker must have either 15 years of contributions, or 5 years since entering insurable employment with at least 3 years in the 5 years before the invalidity. The age limit is the same: under 60 for men and under 55 for women.
How to Claim the Pension
You claim in writing with supporting documents. EOBI provides forms for old-age pension and survivor pension on its official website. The helpline is 08000-3624, free from 8 am to 4 pm, Monday to Friday.
Two timing rules matter. First, a claim must be made within 12 months of the pension becoming payable. If you miss that, the right is extinguished unless EOBI accepts that the delay was beyond your control. Second, the pension is not paid retroactively for more than 6 months before your application. EOBI says over 481,000 old-age pensions and over 258,000 survivor pensions have been disbursed so far. This is a working system.
Your Pension Is Protected
Section 29 of the Act says a benefit under this law cannot be attached in execution of a decree, charged or assigned. That means a creditor cannot seize your EOBI pension to recover a debt. The money is yours.
One catch exists. Section 27 says the pension is suspended while the pensioner is abroad, unless regulations provide otherwise. If you plan to live outside Pakistan, check the current regulations first. The same caution applies to other worker payments, like the overtime pay rules under the Factories Act.
The 2026 Position in One Line
EOBI gives a monthly pension to private sector workers who complete 15 years of insurable employment and reach pension age, with a minimum pension of Rs 11,500 since January 2025, and pensions are now reviewed on a three year cycle.
If your workplace is not paying EOBI contributions, that is a labour rights issue you can raise. See how the law protects workers on harassment complaints, or browse our full blog for other rights guides. Our home page links every guide.
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