WHILE slavery was officially abolished across the US in 1865, it did not die out.

Instead, it mutated, taking on subtler but still lethal forms. Pakistan, too, became one of the practitioners of what is referred to as `modern-day slavery` by either not registering 95 per cent of its workers with the Employees` Old-age Benefit Institution (EOBI) or not depositing their regular monthly pension contribution. This is large-scale cruelty and incompetence.

Here are a few basic facts to grasp the magnitude of this self-created chaos.

Pakistan has a workforce of approximately 75 million workers. Only 11m of them are registered with the EOBI. Of the 11m registered workers, the monthly EOBI contribution is deposited only for 3.28m or 4.4pc of the total workforce (confirmed by the EOBI through a Right to Information request). Thus, 71.7m Pakistani workers have been deprived of their rightful pension and pushed towards a dependent and demeaning future.

An in-depth study of the EOBI reveals earth-shattering insights into our collective callousness. We are guilty of mandating the task of managing the pensions of 75m precious workers to a legally, functionally and professionally inadequate organisation. The EOBI department could not even produce a notification of its existential task, ie, the value of the 6pc amount that must be deposited by the employers.

The EOBI website still refers to a 10-yearold monthly contribution of Rs780, while the verbal response by the EOBI management suggested a contribution of Rs2,220.

Fifty random samples of `proclaimed` EOBI registered workers were chosen to verify the true status of payments made by their employers. There was not a single employee whose payments were completely or correctly reflected on the EOBI website. The department had no answer to explain how it will ever know the amount deposited against a specific employee. A study based on several retired workers revealed that it took many months, reams of photocopies, endless runaround and numerous three-way disputes to determine the true amount contributed against any employee.

Pakistan could learn from a developing country like Uzbekistan whose entire workforce of 19.76m workers is registered in the national pension scheme. There are noinspectors orinstitutionsfor collecting pension contributions. All employers electronically contribute 12pc of the employees` gross salary bill, as `social tax` along with other taxes, directly to the tax department. The distribution of pensions is subsequently implemented by the finance ministry.Why has Pakistan allowed a known dysfunctional system to deprive 96pc of its workers of their legal right to pension? We have made a titanic blunder, and we must be willing to make amends by undertaking immediate, radical and forward-looking pension reforms. Start by completely shutting down the existing EOBI and repealing the Employees` Old-Age Benefits Act, 1976. This would immediately save about Rs2.7 billion of management expenses, recover 96 government vehicles, get back billions invested in buildings and plazas and relieve 657 employees currently engaged in further organisational decay. Declare that the state shall honour and provide for universal pension and social security for all citizens including unorganised workers and self-employed individuals.

De-link the existing `impossible-tomanage` process of employers making payments against a small number (usually 10pc) of their workforce. Introduce mandatory 6pc social tax on the gross salarybill of every employer industrial, commercial or agricultural. Also introduce 1pc social tax on the taxable income of every taxpaying individual.

The social tax for organisations as well as individuals should be collected by FBR as an element of the routineyearly income tax. Using CNIC, pensions could be linked to Nadra records and managed on similar lines as BISP for distribution to all workers of Pakistan. Also, pension is a form of income and like most other countries (including India), must be declared as `taxable income` for those receiving a pension of more than Rs50,000 per month.

If a judge of the high court can be entitled to a pension that is 70pc of his last salary, why can the workers` pension not be pegged to 70pc of the latest notified minimum wage? Inability or inefficiency in collecting 6pc social tax from each employer ought to be the responsibility of the state for which workers cannot be penalised. Pakistan can become a reformed model state by simple acts of providing minimum legal wage and a decent pension to every citizen. Is that asking for too much? • The wnter is an industrial engineer and a volunteer social activist.

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