On August 30, 2025, at 8:01 PM PKT, Pakistan’s federal government approved a 15% increase in pensions under the Employees’ Old-Age Benefits Institution (EOBI).
Minister for Overseas Pakistanis and Human Resource Development Chaudhry Salik Hussain announced the decision after a cabinet meeting. Effective from September 1, 2025, the hike includes arrears and builds on a prior 15% raise set for January 2025.
Minister Hussain confirmed that EOBI pensioners will receive the 15% increase starting September 1, 2025, with arrears included. The EOBI will disburse Rs10 billion monthly to cover the payments. For instance, pensioners with long service can now expect over Rs30,000 per month. This follows a July 2025 cabinet decision to raise the minimum pension from Rs 10,000 to Rs 11,500, effective January 1, 2025, with arrears to be paid from September 1.
The government formed a committee to include informal sector workers, such as domestic and agricultural labourers, in the EOBI system. Hussain emphasised that this initiative aims to expand access to social security. It targets workers who have previously been excluded from pension benefits, thereby enhancing financial support across various sectors.
Context and Economic Impact
The EOBI, established under the 1976 Act, supports retirees through employer and employee contributions, with no government funding since 1995, per Dawn. The pension hikes address rising living costs, as Pakistan’s inflation rate reached 9.6% in July 2025, according to the State Bank of Pakistan. According to Pakistan Today, with over 500,000 pensioners benefiting, the increase offers significant relief, especially after recent floods strained household budgets.
Read: EOBI Anticipates Pension Increase to Rs10,000 in Next Federal Budget
In July 2025, the cabinet approved a 15% increase in the EOBI pension, raising the minimum to Rs 11,500, effective January 1, 2025. The National Assembly’s Standing Committee was assured that arrears would be disbursed by September 1. Consequently, the additional 15% hike announced on August 30 further strengthens retiree support, aligning with the government’s poverty alleviation goals.
The pension increase provides crucial financial relief for retirees. For instance, those with extended service will see substantial monthly gains. Moreover, including informal workers in EOBI reflects a commitment to equitable social security. This could set a precedent for other provinces, enhancing Pakistan’s welfare framework.
