ISLAMABAD: To ease the growing financial strain from pensions, the federal government is said to be considering a proposal for government employees to retire five years earlier.

it will affect the average retirement age from 60 to 55 years in an effort to reduce the ever-increasing pension budget.

Dawn citing a source reported that this is one of the proposals suggested by an international lender and currently under federal government’s consideration as part of wider pension reforms.

To reduce ever-increasing pension expenditure, the last few years have seen alarmingly high levels of expenditure on pensions.

Sources said that if implemented in all government institutions, it could save the government about Rs 50 billion a year.

Of course, a government employee could be entitled to a pension based on his last drawn basic salary at age 60 years, or, in some cases, after completing 30 maximum years of service.

This has all resulted in an amazing annual burden of over Rs1 trillion in pension liabilities.

Though the contributory pension scheme has been introduced for future government employees, experts say a deeper cut will be needed to manage the intoxication of swelling pension bills.

The finance ministry last year suggested an increasing the superannuation age by two years to 62 for temporary delays to payments on account of retirement benefits but it was opposed by the establishment division.

Web Desk
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Web Desk

Laila Tariq, currently associated with Azaad English, is an Islamabad-based journalist with over eight years of extensive experience across print, TV, and digital media.

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