ISLAMABAD: Pakistan’s total salary and pension bills will exceed its total general revenue on annual basis over five to seven years as Islamabad will have to obtain the next IMF loan with major condition to tackle this arising monster. The alarm bells must have rung among the dwellers of Q Block (Ministry of Finance) at the Pakistan Secretariat just ahead of the upcoming budget-making exercise for 2021-22 as it was the crux of discussions held by experts during online webinar organised by Sustainable Development Policy Institute (SDPI) in collaboration with other partners here on Friday. The experts pointed out that 76 percent pension bill consumed by armed forces so they suggested establishing a separate pension fund on the pattern of Malaysia. Former chairman Pay and Pension Commission Abdul Wajid Rana told the audience that the bill of salary and pension was rising at accelerated pace as it stood at 24 percent of total general revenue during 2008-09 but now it went up to 43 percent of total collected general revenue. It went up by 80 percent in terms of compound rate and in nominal terms it increased by 142 percent from 2010-11 to 2019-20. He said the pension hierarchy increased from 5 to 13 during this period. He also shared different factors that resulted into ballooning the arising liabilities on front of salary and pension bills and stated that increased headcount rate without incorporating loss-making public-sector enterprises (PSEs) and Supreme Court judgement for including medical allowances hiked overall bill phenomenally on higher side. In the aftermath of 18th Constitutional Amendment, Abdul Wajid Rana said that the hiring spree in each province hiked expenditures up to 56 percent of total revenue receipts. With this existing pace, he warned that there would be no resources left with the federating units for meeting requirements of development and other expenditures heads. He said that there were many examples both from developed and developing countries where they undertook major pension reforms and cited example of UK where they implemented reforms and saved 3 billion pounds sterling. He said that many other developed countries like US, New Zealand and Canada implemented contributory pension. Among developing countries, he mentioned India, Malaysia and Philippines where contributory pension funds were established. India had kick-started its pension reforms in 2000 and implemented contributory pension fund in 2004. Malaysia established separate pension fund for its armed forces. The Philippines introduced performance-based bonuses and these developing countries undertook reforms successfully. He proposed to rationalise human resource as well as their perks and privileges. He said that the Parliament would have to pass legislation for making changes in beneficiaries of pensioners. He said that the government had regularised contract employees from 2008 to 2013 under the cabinet decision but there was need to hire workforce on contract basis at higher salaries in order to reduce the pension liabilities in future. Zafar Masud, President Bank of Punjab, said that political will was required to implement pension reforms in Pakistan. He said that all new hiring into be done under defined contributory pension system. The existing pension liability needs to be funded either in kind such as land and buildings or in cash albeit in tranches. He said the pension reforms were implemented in OGDCL in 2016 that saved Rs183 billion in 10 years on actuarial calculations. It showed that the same could be replicated in other public sector enterprises as well government ministries and departments. Analyst Hassan Khawar said that the defined contributory pension was not difficult to implement. “It requires investment strategy and to bridge the trust deficit,” he said. Hassan Khawar said that if the pension reforms were not implemented then next IMF programme would fold major condition on pension front.