ISLAMABAD:
The Pakistani government has unveiled a series of pension reforms designed to ease the fiscal burden posed by growing pension liabilities. These measures aim to ensure financial sustainability while addressing inefficiencies in the existing system. A notification from the Ministry of Finance outlines several key changes, including the introduction of a revised pension formula and the imposition of penalties on early voluntary retirement.
One of the most significant reforms is the restriction on double-dipping, where retired government employees rejoin the workforce and simultaneously draw a salary and pension. This practice will no longer be permitted, ensuring that public funds are used judiciously. Additionally, the minimum qualifying period for pension eligibility has been increased from 10 to 15 years, aligning with international standards.
The reforms also propose indexing pensions to inflation, which will ensure that retirees maintain their purchasing power while preventing excessive financial strain on the government. A contributory pension scheme is also under consideration, where employees and employers contribute to a retirement fund, reducing reliance on state resources.
Finance Minister Ishaq Dar stated that these changes were necessary to prevent a looming fiscal crisis, as pension payments currently consume a significant portion of the national budget. He emphasized that the reforms would not affect current retirees, focusing instead on future entrants to the workforce.
Critics, however, argue that the government must also address broader inefficiencies in public administration and tackle corruption to complement these reforms. Nevertheless, experts view these measures as a step in the right direction toward ensuring long-term economic stability.
