Pension reforms at federal, provincial levels stressed

Pension reforms at federal, provincial levels stressed

Islamabad:Brining reforms about pensions is an urgent need to ensure sustainable fiscal growth at the federal as well as at provincial levels. Speakers said this while sharing their views with the participants during an online dialogue on “Reform of pensions: lessons from successful examples in Pakistan” organised by Sustainable Development Policy Institute in collaboration with Sustainable Energy and Economic Development (SEED). The former head of Federal Pay and Pension Commission, Wajid Rana said that any pension reforms cannot be separated from pay reforms. Both pay and pension bills are growing at a rapid pace and more is being consumed from the general revenue collections due to this increase, he added. Sheena Ali Mansoor, Joint Secretary, Ministry of Overseas Pakistanis and Human Resource Department, said that Employees Old Age Benefit Institution (EOBI) has huge potential which is not being used. Currently, EOBI is dealing with the formal sector only. However, efforts are being made to cover the informal sector and Overseas Pakistanis as well. There are three ways to increase funds, i.e., through contribution, investments, and government support, she said adding that EOBI has 8 million registered pensioners and there are lots of ghost pensioners which are required to be purged out. Hasaan Khawar, Team Leader, SEED, was of the view that pension is highly critical to Pakistan’s fiscal sustainability and probably, new IMF programme would be dealing with this issue. He added further that the The government of Khyber-Pakhtunkhwa started focusing on pension reforms as in coming years, the provincial government would not be able to pay salaries and pensions and similar is the situation of other provinces. Therefore, we need to address this problem politically, administratively, and technically, he continued. Zafar Masud, President, Bank of Punjab, highlighted that there is no argument that pensions fund is needed to be developed in Pakistan. Fund management is important, and it could be done involving private sector. Dr Vaqar Ahmed, Joint Executive Director, SDPI, said that the pension budget at the Federal level has seen a growth of over 20 per cent annually during the last five years. For Khyber-Pakhtunkhwa provincial budget, the pensions grew 10 times between 2010 and 2019, which is faster than the growth of overall revenues of the province. He said that an evaluation is needed to identify difficulties in implementing various reconditions. Such discourse, therefore, aims at bringing together government officials and independent experts to highlight fiscal policy challenge, he added. Hamid Farooq, Managing Director, Pak Telecom Employees Trust opined that the government in the short run needs to work out on data of beneficiaries, analyse its pensions' liabilities, and then make an independent organisation by adding relevant stakeholders. Syed Nayyar Hussain, Director, Policy Regulation and Development Department, Securities, and Exchange Commission of Pakistan, stressed that the government needed to develop a holistic pension scheme covering social pensions, government pensions, and individual pensions.