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Pakistan

In the South Asian region, Pakistan is one of the few countries which covers all sorts of contingencies recognised by ILO conventions. The percentage of workers covered under these schemes is relatively high as compared to other countries of the region, but still very low as compared to developed countries of the world.  The pension and social security coverage is limited to the formal economy workers whereas the informal or unorganised sector fall outside the purview of the statutory provisions usually administered through registered public and private enterprises.  The structural adjustment policies have reduced social budgets, privatised public sector units and downsized Governments. These policies and programmes have in turn tended to reduce the number of individuals covered by the pension and social security schemes as incremental employment is generated in the informal economy.  Pension and social security in the formal economy are currently provided through social insurance programmes and other employer benefit schemes.

The current schemes can be divided into two main categories: The first category consists of the “general” or “by default” schemes. These are the Government schemes that employers in firms of 10 workers or more are required to contribute to, unless they have been specially exempted by legislation. The coverage is voluntary for employees in firms of less than 10 workers. The Employees Old Age Benefits Institution (EOBI) is a federal body that provides age, disability and survivors pensions. The Employees Social Security Institutions are provincial bodies (ESSls) that provide health services and some cash benefits to retired and senior citizens. The EOBI covers approximately 1.3 million workers, while the ESSls cover only 850,000 (2007).

The second category consists of schemes that are specific to particular sectors or enterprises and are specifically exempted from membership of the general schemes. The main category exempted consists of Government workers, members of the armed forces, and some others. Besides, commercial and industrial establishments with 50 employees or more must provide group insurance for temporary and permanent disability and death benefits for employees earning less than 3,000 rupees a month.

For more details about the eligibility conditions, the exclusions, the level of premiums and benefits depending on the risk covered (sickness, maternity, employment injury, unemployment, invalidity, old age and death), please visit the following website : The Pakistan page in the US Social Security Administration website.

The pension and social security coverage is thus limited to the formal economy whereas the informal or unorganised economy fall outside the purview of the statutory provisions usually administered through registered public and private enterprises. As mentioned before, the structural adjustment policies have reduced social budgets, privatised public sector units and downsized Governments. These policies and programmes have in turn tended to reduce the number of individuals covered by the pension and social security schemes as incremental employment is generated in the informal economy.