Panel proposes overhaul of pay, pension system

New scheme of pension, elimination of unrealistic allowances suggested

ISLAMABAD:

The Pay and Pension Commission (PPC) set up by the federal government will propose a massive overhaul of the salaries and pensions system and suggested a salary survey for increment to the government employees.

The commission, which will finalise its recommendations in a meeting on June 13, before forwarding them to the federal government, has stressed the need for streamlining the allowances, saying that several allowances to the employees were unrealistic in modern times.

The proposals include a new pay and pension system by amalgamating all the ad-hoc allowances in the salaries and increase in house rent, conveyance allowance, night allowance, long stay in office, military allowance and others, sources said on Thursday.

According to the sources, the commission proposed restructuring of the salaries of government employees and introducing a uniform pay system by eliminating the difference in salaries of employees in different departments.

The commission proposed that surplus employees be transferred to their parent departments by eliminating unnecessary posts, while the new employees should be recruited under the new system instead of under the definite benefit (DB) system, they added.

Declaring the growing burden of the pension bill unbearable for the national exchequer, it had proposed a new system of pensions. The commission calls for establishing a National Pension Fund for future recruitments.

Under the new pensions system, according to the PPC, a certain amount would be deducted from the salaries of the employees and on retirement, the employee would continue to receive pension from the fund as per employment contract.

In this way, the commission said, the pension bill would be eliminated from the national treasury ledger and then the government would have to do nothing with the payment of pension. However, the proposed system would not apply to present employees under the DB system.

The sources said that the PPC reviewed about 150 different allowances for civil and military employees. The PPC proposed the abolition of medical allowance and suggested the introduction of health insurance.

The sources said that the implementation of all the recommendations of the PPC would not be possible in the federal budget for the next financial year, which would be unveiled in the National Assembly on Friday (today).

However, it was possible that if the salaries of the government were to be increased in the budget, it will again be an ad hoc relief. The reason, the sources said, the PPC had recommended a survey for increment that required time.

According to the sources, the PPC wanted that its recommendations and proposals were presented in parliament for approval and notified through official gazette. The commission also called for making its report public.

To fix the pay and pension system and improve the fiscal management in future, the PPC said, all of its recommendations should be implemented, which would have far-reaching effects on the national treasury.

In the past, 25 reports of the pay and pension commissions had been presented but none was implemented in full, the sources said, adding that since the creation of Pakistan, the pay scales of the government employees had been changed three times.

Since the creation of Pakistan till 1972, the perpetual pay scales were in vogue. Later, the national pay scales were introduced in 1972. However, four years later, the basic pay scales (BPS) were introduced, which are still in force.

At present, the government employees received about 150 allowances, but the PPC noted that many of them have become out-dated. These include the Rs80 mufti allowance for the military personnel and Rs150 nursing suit allowance for nurses.

The mufti allowance is a one-time payment for tailoring dress. Likewise, nurses get Rs150 for a nursing suit. Now, the sources said, one could hardly buy just one metre of cloth with that amount. There were many other benefits of these types that are highly unrealistic, they said.

The PPC had recommended that out of those allowances received by the employees, unnecessary allowances should be removed while the existing allowances should be paid as per requirement of the modern day.