Good news for private employees in Pakistan as court orders major relief

ISLAMABAD: The Federal Constitutional Court has ordered the provision of old-age pension to employees of private institutions and directed the Employees’ Old-Age Benefits Institution (EOBI) to pay monthly pensions to all petitioners, ARY News reported.

According to reports, the court ruled that private employees who have completed 14 and a half years of service, even if less than 15 years, are eligible for a pension. It clarified that six months or more of service will be counted as one full year under the law.

A three-member bench headed by Chief Justice Ameenuddin Khan issued the verdict, dismissing all appeals filed by EOBI. The court upheld the Lahore High Court’s decisions of 2024 and 2025, declaring them correct and stating that there was no scope for interference.

The Federal Constitutional Court declared that the schedule is an integral part of the law and that EOBI’s 2022 circular cannot affect employees’ legal right to pension.

The court observed that denying a pension through a strict interpretation of welfare laws amounts to injustice. It further ruled that employees with more than 14 and a half years of service will be treated as having completed 15 years.

The court also ruled that the principle of rounding off will apply in pension matters.

EOBI pensioners to receive 15pc increase

On August 30, 2025, the federal cabinet approved a 15 percent increase in the Employees Old-Age Benefits Institution (EOBI) pensions.

According to a statement issued here, pensioners will start receiving payments, including arrears from September 1.

EOBI will disburse approximately Rs 10 billion per month for pensions.

The statement read that with the increase, pensioners with long service records will now be eligible to receive monthly pensions exceeding Rs 30,000.

Meanwhile, a committee has been formed to induct workers from the informal sector, domestic employees, and agricultural labourers in the EOBI scheme.

Federal Minister for Overseas Pakistanis and Human Resource Development Chaudhry Salik Hussain said that the federal government is committed to the welfare and social protection of the labour class.

Under EOBI Scheme, insured persons are entitled to avail benefit like, old-age pension (on the event of retirement), invalidity pension (In case of permanent disability), old-age grant (an insured person attained superannuation age, but does not posses the minimum threshold for pension) survivor’s pension (in case an insured person is expired).

Pension Rates:

• Minimum Rs. 10,000
• Maximum as per formula