Talks begin on reforms to trim pension spending

In line with commitments with the multilateral lenders to contain ever-rising pension bill, the government has started inter-ministerial consultations for major pension reforms including reduced benefits in commutation and regular payments for existing pensioners and the beginning of a contributory pension scheme for current employees. A senior official at the Ministry of Finance told Dawn that all federal ministries and divisions had been asked to submit their comments on proposed “amendments in the pension scheme for existing pensioners and employees of the federal government”. Most of the ministries have already submitted their views by the deadline this week and were being compiled for presentations to the all-powerful Special Investment Facilitation Council — a supra body of civil-military leadership led by the prime minister. He said a few reform measures affecting the current influential officers had already been announced by former finance minister Ishaq Dar in his 2023-24 budget speech but could not be implemented owing to resistance from the beneficiary bureaucrats. The proposed reforms have been based on the recommendations of the Pay and Pension Commission 2020 to check the unsustainable rise in pension burden on the budget.