ISLAMABAD: The Federal Constitutional Court has granted a significant relief to private employees in Pakistan by ordering the provision of old-age pensions. The court directed the Employees’ Old-Age Benefits Institution (EOBI) to pay monthly pensions to all petitioners.
The court ruled that private employees who have completed 14 and a half years of service—despite falling short of 15 years—are eligible for a pension. It also clarified that service of six months or more will be counted as one full year under the law.
A three-member bench, led by Chief Justice Ameenuddin Khan, issued the ruling and dismissed all appeals filed by EOBI. The court upheld the decisions made by the Lahore High Court in 2024 and 2025, stating that there was no need for interference.
The Federal Constitutional Court further emphasized that the schedule is an essential part of the law and that EOBI’s 2022 circular cannot alter employees’ legal rights to pensions. The court also remarked that denying pensions based on a rigid interpretation of welfare laws constitutes injustice. Employees with more than 14 and a half years of service will now be treated as having completed 15 years.
In addition, the court ruled that the principle of rounding off will apply in pension matters.
EOBI pensioners to receive 15% increase
On August 30, 2025, the federal cabinet approved a 15 percent increase in the EOBI pensions. Pensioners will begin receiving their payments, including arrears from September 1.
EOBI is set to disburse approximately Rs 10 billion per month for pensions. With this 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 include workers from the informal sector, domestic employees, and agricultural laborers in the EOBI scheme.
Federal Minister for Overseas Pakistanis and Human Resource Development, Chaudhry Salik Hussain, affirmed that the federal government is committed to the welfare and social protection of the labor class.
Under the EOBI scheme, insured persons are entitled to various benefits, including old-age pensions (at retirement), invalidity pensions (in case of permanent disability), old-age grants (for those who reach the superannuation age but do not meet the pension requirements), and survivor’s pensions (in the event of an insured person’s death).
Pension Rates:
* Minimum: Rs 10,000
* Maximum: As per formula
