In a landmark ruling that could change the landscape for many workers, the Federal Constitutional Court has mandated that the Employees’ Old-Age Benefits Institution (EOBI) initiate monthly pension payments for eligible private sector employees. This decision brings much-needed relief to countless retirees who have been anxiously waiting for such support.
The court's ruling stipulates that all individuals who have submitted petitions are entitled to receive old-age pensions. Crucially, it clarifies that those who have served for more than 14 years and six months will still qualify for benefits, even if they do not reach the full 15-year service requirement. This means that any period of employment of six months or longer will be counted as a complete year when assessing eligibility for pensions.
A three-judge panel, headed by Chief Justice Aminuddin Khan, delivered this verdict, dismissing all appeals made by EOBI against earlier decisions. The court reaffirmed earlier judgments from the Lahore High Court (LHC) made in 2024 and 2025, asserting their legal integrity and stating that no changes were needed.
In its decision, the court emphasized that the pension schedule is fundamental to the law and cannot be overridden by administrative orders, such as a circular issued by EOBI in 2022. The judges pointed out that overly narrow interpretations of welfare laws defeat their intended purpose and lead to unjust outcomes for workers who rely on these benefits.
Furthermore, the judges established that pension cases should adhere to a rounding principle. Consequently, employees with over 14.5 years of service will be regarded as having met the 15-year requirement for pension eligibility.
In addition to this ruling, the government has also taken steps to broaden EOBI coverage to include workers in the informal economy, such as domestic employees and agricultural laborers. This expansion reflects a growing recognition of the need to protect all workers under the pension system.
Under the EOBI framework, insured individuals are eligible for a variety of benefits. These include old-age pensions upon retirement, invalidity pensions for those facing permanent disabilities, survivor pensions for dependents, and old-age grants for individuals who reach retirement age without fulfilling the minimum service criteria.
This development raises important questions about the fairness and accessibility of pension systems in general. Are there enough measures in place to support all workers, particularly those in vulnerable positions? What more can be done to ensure equitable treatment across various sectors? We invite you to share your thoughts on these pressing issues.
