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News Desk

Pakistan Observer

Published Date: Jun 24, 2021

https://pakobserver.net/pension-regime-needs-comprehensive-reforms-report/

Pension regime needs comprehensive reforms: Report

Additional Secretary Finance, Government of Khyber Pakhtunkhwa, Safeer Ahmed, has said that KP is the first province to revise the retirement age to properly manage pension liabilities.

The provincial government in this regard has introduced a contributory scheme for new employees to address the growing pension expenditure.

These views were expressed by him while addressing the launching ceremony of a report on ‘Government pensions and future fiscal sustainability,’ organized by Sustainable Development Policy Institute (SDPI), in collaboration with Sustainable Energy and Economic Development (SEED) here on Wednesday.

Safeer Ahmed said that the future plans are in the pipeline for remaining employees to include an amount from their basic pay towards pensions. This is also in line with the practice in other countries.

Team Leader SEED Programme in Khyber Pakhtunkhwa, Hassan Khawar, was of the view that with the current growth rate of pensions and salaries payments, the government will run out of finance to carry out development expenditures in near future.

“All the provinces in Pakistan have unfunded pension liabilities while the world is managing pensions through contributory pension system,” Khawar added saying that the transition towards defined contribution, however, is a difficult process.

KP has taken the lead to change the pension rules and is also increasing pension for widows. From July onward, new employees will be engaged in defined contributory pension model, he concluded.

Joint Executive Director SDPI, Dr. Vaqar Ahmed presented a detailed note of the report furnished by SDPI and SEED and said that it is focusing on how public sector pension expenditures are endangering fiscal sustainability of the Government of Khyber Pakhtunkhwa while all the provinces are facing the same dilemma.