The apex constitutional court has made a significant move by broadening the criteria for pension eligibility among private sector employees.
In a landmark decision, the Federal Constitutional Court has mandated that the Employees’ Old-Age Benefits Institution (EOBI) promptly commence monthly pension disbursements to qualifying workers. This directive offers much-needed relief to countless retirees, particularly those who have served in the private sector.
According to the court's ruling, all petitioners are entitled to receive old-age pensions. Importantly, the court clarified that employees who have completed a service duration exceeding 14 years and six months are eligible for benefits—even if they do not reach the conventional 15-year threshold. To ensure fairness, the ruling stipulates that any service period of six months or more will be regarded as a full year when assessing pension eligibility.
This decision was delivered by a three-judge panel headed by Chief Justice Aminuddin Khan, who rejected all appeals brought forth by the EOBI. The court affirmed previous rulings from the Lahore High Court (LHC) made in 2024 and 2025, deeming them legally robust and in need of no alterations.
In justifying its ruling, the court underscored that the pension schedule is an essential element of the law that cannot be superseded by administrative instructions, such as a circular issued by EOBI in 2022. The judges pointed out that a narrow application of welfare laws defeats their intended purpose and leads to unjust consequences for workers.
Additionally, the court ruled that pension cases should adhere to a rounding-off principle—meaning that employees with over 14.5 years of service will be considered as having fulfilled the requisite 15 years necessary for pension qualification.
In a further step towards inclusivity, the government has established a committee tasked with broadening EOBI coverage to encompass workers in the informal sector, which includes domestic workers and agricultural laborers.
Under the EOBI framework, insured individuals enjoy various benefits, such as old-age pensions upon retirement, invalidity pensions for those facing permanent disabilities, survivor pensions for dependents, and old-age grants for those reaching retirement age without meeting the minimum service requirements.
This decision raises important questions about the adequacy of support systems for all workers. What implications do you think this broadened eligibility will have on the future of pension policies? Share your thoughts in the comments!
