Legally Required Benefits A Pakistani Perspective Muhammad Faheem Safdar & Marriam Furqani

1. Legally Required Benefits

2. Legally Required Benefits
The Pakistani Scenario
Presented to:
Sir Nadir Idrees
Presented by:
Faheem Safdar & Marriam Furqani

3. Contents
What are benefit?
History of LRB in Pakistan
The Social Security System in Pakistan
Pensions for Public Sector Employees
The Umbrella of EOBI
The Gratuity in Private & Public Sector

4. Types of Benefits
Name the benefits you think should be
offered by companies
Which of these benefits are required by law?
Why would a company offer benefits if not
required by law?
– Employee expectations and satisfaction
– Attract, motivate, retain
– Competitiveness

5. The LRB history in Pakistan
The Factories Act, 1934 provides that every
worker is entitled to 10 days casual leave
with full pay and further 16 days sick or
medical leave on half pay.

6. The LRB in Pakistan
• Under section 49 of the Factories Act,
workers are entitled to enjoy gazetted
holidays
• If worker is required to work on holiday
he or she will be allowed substitute
holiday on full pay

7. LRB – The benefit of CBA
Freedom of Association: Article 17 of the
Constitution of Pakistan allow every citizen
the right to form associations or unions

8. LRB & Female workers
The Maternity Benefit Ordinance, 1958
prohibits the dismissal of the woman during
her maternity leave
Mines Maternity Benefit Act, 1941 is
applicable to women employed in the mines
in Pakistan

9. Social Security Systems
– "Social security systems mean the systems to enable every citizen to
lead a worthy life as a member of cultured society. Social security
systems provide countermeasures against the causes for needy
circumstances including illness, injury, childbirth, disablement, death,
old age, unemployment and having a lot of children by implementing
economic security measures through insurance or by direct public
spending.
– Social security systems ensure the minimum level of living to the
needy by public assistance, and they also promote public health and
social welfare."

10. Components of a Social
Security System
Old-age, invalidity and survivors
– Pensions or, more completely, Retirement
Benefit Schemes
Employment Injury
Sickness and Health-care
Unemployment benefits
Family benefits

11. Where does Pakistan stand on
Social Security ?
Total social security
expenditure
(percentage of GDP)
All Countries 14.5%
Europe 24.8%
Asia 6.4%
India 2.6%
Pakistan 1.1%
Large amount of individual philanthrophy – not documented

12. Where Does Pakistan Stand ?
Coverage ?
Old-age, invalidity and
survivors
Some
Employment Injury Some
Sickness and Health-care Some
Unemployment benefits None
Family benefits None
10-06-2015

13. Pensions - Where Does Pakistan
Stand ?
Country
Covered Wage
Bill/GDP (%)
Contributors/
Labour Force
(%)
Contributors/
Working Age
Pop. (%)
Pakistan 0.6 3.5 2.1
India 3.2 10.6 7.9
Malaysia 17.4 48.7 37.8
UK 89.7 84.5

14. The Umbrella of EOBI
Employees’ Old-Age Benefits Institution (EOBI), formed in
1976, The government entity for management of the national
pension scheme in Pakistan.
Collection = 50,000 companies.
disburses pension payments = 400,000 pensioners per month
Benefits provided by EOBI:
1.Old- Age pension
2.Survivors Pension
3.Invalidity Pension
4.Old-Age Grant
10-06-2015

15. Umbrella of EOBI (2015)
RATES:
1- Employer's Contribution @ 5 % of the worker's
minimum wages (i.e. Rs. 13000) Rs. 650/= Per Month
2- Employee's Contribution @ 1 % of the worker's
minimum wages (i.e. Rs.13000) Rs. 130/= Per Month

16. The Gratuity in Private Sector
Gratuity is one of three prevalent retirement
benefits in the private sector employment.
The other two are “Pensions and Provident
Fund”.

17. The Gratuity in Private Sector
It is a "lump-sum" amount of money
payable to a worker on leaving service
(through retirement, death or termination of
service) based on salary (highest or the final
salary) and period of service (over and
above six months).

18. The Gratuity in Public Sector
A retiree can either opt to receive his/her
whole pension continuously per month till
the expiration.
OR
The retiree can opts for Gratuity; 65 percent
of total pension amount in lumpsum while
35% for remaining the life.

19. Thank You 