Cabinet approves pension reforms to ‘save billions’

Meeting told that changes can save up to Rs895 billion

KARACHI:

The Sindh cabinet meeting on Friday approved a pension reforms scheme under which Rs894.4 billion would be saved. Otherwise, it was believed that the government's pension bill would surpass that of salaries over the next 10 years.

The meeting was held under the chairmanship of Sindh Chief Minister Syed Murad Ali Shah at the CM House on Friday. Provincial ministers, advisors, Sindh Chief Secretary Mumtaz Shah and others attended the moot.

The chief minister, being in charge of the finance department, told the cabinet that the number of government employees were 477,570 in 2012 and their monthly salary and pension bill was Rs11.78 billion and Rs6.523 billion, respectively.

He added that in 2020, the number of employees increased to 493,182 and the monthly salary bill increased to RS23.97 billion, while the pension bill rose to RS13.329 billion.

"If the same post-retirement liabilities, including pension, commuted value of pension, gratuity, family pension and others are continued unabated, the pension bill will exceed the salary bill within the next 10 years," he said.

The CM added a study has been conducted so that necessary reforms could be introduced to control the ballooning pension bill. Shah said that a restriction on early retirement (minimum 25 years of service and 55 years of age) with a reduced pension, according to the number of years in service, was being proposed.

The chief minister, talking about another reform proposal, said the average pay of the individual official over the last three years of service would be used as the basis to calculate the amount of pension instead of the last drawn salary.

"Setting pensionable salary to average salary of last three years has a reasonable financial impact on the accrued pension liability of active employees," he said.

Shah elaborated that accrued pension liability would decrease by Rs348.827 billion. Talking about family pension, the chief minister proposed limiting the facility to immediate relatives.

"Family pension may be limited to wife or wives/ husband/son (below 21 years)/daughter till marriage," he suggested. The cabinet approved the proposal and appreciated the efforts of the chief minister to introduce reforms. KICVD handover Sindh Health Minister Dr Azra Fazal Pechuho presented a proposal to hand over the Karachi Institute of Cardiovascular Disease (KICVD) to the Sindh Institute of Cardiovascular Diseases (SICVD) so that it could be made a world-class institute like NICVD and its satellites. The cabinet approved handing over of KICVD to SICVD along with its staff.

The chief minister directed the health department to ensure budgetary allocations in the next financial year to and further modernise the institute. Cold Chain vehicles Pechuho told the cabinet that the Extended Programme for Immunisation requested for provision of 28 cold chain Vehicles. These included 20 cold chain and eight ultra-freezing vaccine carriers at a cost of Rs348.853 million to supply Covid-19 vaccines across Sindh.

The cabinet, keeping in view the urgent need of cold chain vehicles, approved the proposal. Establishing SIAE&G The provincial cabinet was told that there was a dire need to establish the Sindh Institute of Advanced Endoscopy and Gastroenterology (SIAE&G) Karachi at Dr Ruth KM Pfau Civil Hospital Karachi to treat underprivileged patients.

The health minister said the endoscopy unit operating at Surgical Ward-4 of the hospital was not enough.

The cabinet approved the proposal and directed Sindh Minister for Parliamentary Affairs Mukesh Chawla to get it passed at the earliest. Revenue collection During the meeting, Murad Ali Shah told the cabinet that the Sindh Revenue Board, in 11 months (July to May 2020-21), collected Rs108.686 billion against Rs91.198 billion during the same period of 2019-20.

He pointed out that this showed an increase of 19 percent. He said that during May 2021, the SRB collected Rs10.261 billion as compared to Rs6.734 billion in the same month of 2020. This showed a growth of 52 percent. The cabinet appreciated the performance of the SRB.