Experts suggest urgent reforms in current pension system

ISLAMABAD: Bringing reforms about pensions is an urgent need to ensure sustainable fiscal at federal as well as at provincial levels.

The speakers said this while sharing their views with the participants during online dialogue ‘Reform of Pensions: Lessons from Successful Examples in Pakistan’ organized here on Sunday by Sustainable Development Policy Institute (SDPI), in collaboration with Sustainable Energy and Economic Development (SEED).

Former head of Federal Pay and Pension Commission, Wajid Rana said that any pension reforms could not be separated from pay reforms. Both pay and pension bills were growing at a rapid pace and more was being consumed form the general revenue collections due to this increase, he added.

Joint Secretary, Ministry of Overseas Pakistanis and Human Resource Department, Ms Sheena Ali Mansoor, on the occasion said that Employees Old Age Benefit (EOBI) had huge potential which was not being used. Currently, EOBI is dealing with the formal sector only. However, efforts are being made to cover the informal sector and Overseas Pakistanis as well.

She added further that there were three ways to increase funds I.e., through contribution, investments, and government support. Besides, EOBI has 8 million registered pensioners and there are lots of ghost pensioners which are required to be purged out.

President, Bank of Punjab Zafar Masud , highlighted that there was no argument that pensions fund was needed to be developed in Pakistan. Fund management is important, and it could be done involving private sector, he added.

Joint Executive Director, SDPI Dr. Vaqar Ahmed, covered various aspects of the topic and said that the pension budget at the federal level had seen a growth of over 20 percent annually during the last five years. For Khyber Pakhtunkhwa, provincial budget the pensions have grown 10 times between 2010 and 2019, which is faster than the growth of overall revenues of the province.

Managing Director, Pak Telecom Employees Trust, Mr Hamid Farooq, opined that the government in short run needed to workout on data of beneficiaries, analyse its pensions’ liabilities and then make an independent organization by adding relevant stakeholders.