Pensions in Pakistan

'''Pensions in Pakistan''' are retirement benefits and social security payments for eligible workers and civil servants in Pakistan.<ref>[https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3761405 Directions for Pensions in Pakistan.] ''Social Security, Pensions & Retirement Income eJournal.'' Social Science Research Network (SSRN). Accessed 7 February 2021.</ref> The country's pension landscape includes statutory contributory schemes for formal employees, voluntary private pension products, civil-service pension reforms and social transfers that affect older people. Coverage is low outside the formal sector and recent years have seen policy changes to expand and reshape provision.<ref>{{cite web |title=Pension and Social Security Schemes in Pakistan: Some Policy Options |work=Pakistan Institute of Development Economics |url=https://www.pide.org.pk/pdf/Working%20Paper/WorkingPaper-42.pdf |access-date=8 October 2025}}</ref>

==Overview== Pension arrangements are a mix of statutory, employer-based and voluntary schemes. The Employees Old-Age Benefits Institution (EOBI) provides a basic contributory pension for many private-sector workers in covered establishments. Civil servants historically received defined-benefit pensions but in 2025 the federal government moved to a contributory model for new entrants and provential governments have issued rules for defined-contribution pension schemes.<ref>{{cite web |title=List of Authorized Electronic Money Institutions (EMIs) |url=https://www.sbp.org.pk/ps/PDF/List-of-EMIs.pdf |work=State Bank of Pakistan |access-date=8 October 2025}}</ref><ref>{{cite news |title=Pension shake-up: Finance ministry enforces new ... |url=https://www.dawn.com/news/1946440 |work=Dawn |date=4 August 2025 |access-date=8 October 2025}}</ref>

==Coverage== Most pension coverage in Pakistan is limited to formal sector workers who are covered either by employer schemes or by EOBI.<ref>[https://www.pide.org.pk/pdf/Working%20Paper/WorkingPaper-42.pdf Pension and Social Security Schemes in Pakistan: Some Policy Options] by Naushin Mahmood & Zafar Mueen Nasir (Pakistan Institute of Development Economics) - 2008</ref> The informal sector, which accounts for the majority of employment in Pakistan, remains largely outside formal pension coverage, leaving many older people without contributory retirement income.<ref>{{cite web |title=EOBI Pension Scheme is contributory and narrow in coverage |url=https://tribune.com.pk/story/2463708/need-to-save-eobi-pension-scheme |work=The Express Tribune |date=24 April 2024 |access-date=8 October 2025}}</ref>

Normal pension age under earnings-related private sector arrangements is generally 60 for men and 55 for women with a minimum period of contributions (typically 15 years), according to the OECD overview for the Asia/Pacific region.<ref>{{cite web |title=Pakistan: Pensions at a Glance Asia/Pacific 2024 |work=OECD |url=https://www.oecd.org/en/publications/pensions-at-a-glance-asia-pacific-2024_d4146d12-en/full-report/pakistan_7d9acef7.html |access-date=8 October 2025}}</ref>

==Pension Funds and Schemes== ===Employees Old-Age Benefits Institution (EOBI)=== The Employees Old-Age Benefits Institution (EOBI) was established under the EOB Act 1976 and is Pakistan's main statutory pension scheme for workers in registered establishments. Contributions are paid by employers and workers, the law sets contribution rates and the benefit formula. EOBI pays old-age pensions, survivors pensions and disability benefits to eligible claimants.<ref>{{cite web |title=Employees' Old-Age Benefits Institution |url=https://www.eobi.gov.pk/ |work=EOBI |access-date=8 October 2025}}</ref>

EOBI has been the subject of policy debate on adequacy and sustainability. Coverage is concentrated among registered employers, many private-sector and informal workers remain outside the scheme. In recent years EOBI reported growth in revenues and the government authorised periodic increases in minimum pension levels, while trade unions have called for further reforms to expand coverage and improve pension adequacy.<ref>{{cite web |title=EOBI records Rs116b revenue in first three quarters of FY2024-25 |url=https://www.nation.com.pk/29-Apr-2025/eobi-records-rs116b-revenue-in-first-three-quarters-of-fy2024-25 |work=The Nation |date=29 April 2025 |access-date=8 October 2025}}</ref><ref>{{cite news |title=EOBI pensioners urge govt to increase pension |url=https://www.brecorder.com/news/40325376 |work=Business Recorder |date=4 October 2024 |access-date=8 October 2025}}</ref>

Contribution arrangements were amended in line with minimum wage changes and other statutory adjustments effective from July 2024, employers typically contribute a percentage of wages and the worker contributes a smaller share, as set out in EOBI regulations.<ref>{{cite web |title=New minimum wage and amended EOBI contributions |url=https://mercans.com/resources/statutory-alerts/pakistan-new-minimum-wage-and-amended-eobi-contributions-1-july-2024/ |work=Mercans |date=1 July 2024 |access-date=8 October 2025}}</ref>

===Civil service pensions and contributory reform=== Historically, federal civil servants received defined-benefit pensions. In 2024 the federal government announced the introduction of a contributory pension fund scheme for new entrants to the federal civil service. The Ministry of Finance circular (3 September 2024) explained that the Contributory Pension Fund Scheme will apply to new hires and set out contribution arrangements and governance measures.<ref>{{Cite web| title=Introduction of contributory pension fund scheme fcr the new entrants | url=https://www.finance.gov.pk/circulars/circular_03092024.pdf | archive-url=https://web.archive.org/web/20241103111151/https://www.finance.gov.pk/circulars/circular_03092024.pdf | archive-date=2024-11-03}}</ref>

Provinces have followed with their own defined-contribution frameworks. Government of Puniab issued the Punjab Defined Contribution Pension Scheme Rules (2025) setting out account types, default fund allocations and employer-employee contribution mechanics for provincial employees.<ref>{{cite web |title=Punjab Defined Contribution Pension Scheme Rules, 2025 |url=https://finance.punjab.gov.pk/system/files/Punjab%20Defined%20Contribution%20Pension%20Scheme%20Rules%2C%202025.pdf |work=Government of Punjab |date=19 February 2025 |access-date=8 October 2025}}</ref> The Khyber Pakhtunkhwa government followed with their rules setting out the rates for contributions among employee and employer.<ref>{{Cite web | title=Government of KP | url=https://dcms.finance.gkp.pk/ | archive-url=https://web.archive.org/web/20230214163708/http://dcms.finance.gkp.pk/ | access-date=2025-07-24 | archive-date=2023-02-14}}</ref>

===Voluntary Pension Scheme=== The Voluntary Pension System (VPS) allows individuals to join privately managed pension funds administered by asset managers licensed in Pakistan. The Mutual Funds Association of Pakistan (MUFAP) provides guidance and performance data for VPS products. VPS funds can be conventional or Shariah-compliant and attract tax incentives within statutory limits.<ref>{{cite web |title=Voluntary Pension Schemes |url=https://www.mufap.com.pk/WebPost/WebPostById?title=VoluntryPansionFund(VPS) |work=MUFAP |access-date=8 October 2025}}</ref><ref>{{cite web |title=Voluntary Pension Schemes - guide |url=https://www.jamapunji.pk/sites/default/files/Voluntary%20Pension%20Schemes%20%28VPS%29%20-%20A%20Concise%20Guide%20for%20Investors.pdf |work=JamaPunji |access-date=8 October 2025}}</ref>

==References== {{reflist}}

==External links== * [https://web.archive.org/web/20121224084125/http://www.mcbah.com/pension_funds/pakpensionfund.aspx Pakistan Pension Fund] (PPF) * [http://www.savings.gov.pk/pba.asp National Savings - Pension Accounts] * [https://ideas.repec.org/p/pid/wpaper/200842.html Pension and Social Security Schemes in Pakistan: Some Policy Options] * [https://web.archive.org/web/20130430073534/http://opf.org.pk/frmFAQ.aspx?FaqType=Pension Overseas Pakistanis Foundation - Pensions] * [http://www.eobi.gov.pk/ Employees Old-Age Benefits] * [https://www.eobipensions.pk// EOBI]

Category:Pensions in Pakistan

Pensions in Pakistan

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