Pension reforms

Sindh cabinet has approved a pension reforms scheme to strike balance between pensions and salaries of govt employees


June 06, 2021

The Sindh cabinet has approved a pension reforms scheme to strike a balance between pensions and salaries of government employees. The provincial government says that the reforms have been necessitated to control the ballooning pension bill. The reforms are being undertaken in light of an expert study that has anticipated that over the next 10 years the pension bill will exceed the salary bill.

Chief Minister Murad Ali Shah, who also holds the finance portfolio, informed a cabinet meeting on Friday that since 2012 the number of government employees had been rising and so had been their salaries and pension bills. In 2020, the number of employees stood at 493,182, their monthly salary bill at Rs23.97 billion and the pension bill at Rs13.29 billion, and if the pension bill keeps on increasing at the current pace, it is feared that the amount of pensions would surpass that of salaries in around a decade.

In order to check the “unabated rise in post-retirement benefits” of employees, the Sindh government has announced several measures to balance its books. It has been proposed that those seeking early retirement after putting in 25 years of service will get reduced pension; the amount of pension will not be commuted on the basis of emoluments in the last three years before retirement but on the basis of the last salary drawn; and only immediate relatives — wife/wives, husband, son less than 21 years of age, and daughters before their marriage — will be eligible for family pension.

There are reports that payment of pension and other benefits of retired employees of the provincial government are being inordinately delayed. Therefore, one of the reasons for the proposed pension reforms might be the ever-increasing salary bills of employees. Even though experts have recommended the reforms after a thorough study of the whole issue, the authorities have seemingly bypassed those to be directly affected. Input should be taken from all stakeholders — especially the employees — before implementing the reforms. It is all the more necessary in view of the galloping inflation.

Published in The Express Tribune, June 6th, 2021.

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