Thursday, June 24, 2021

No early retirement as Sindh okays reforms to cut pension bill

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KARACHI: The Sindh cabinet on Friday approved a set of reforms to cut the province’s ballooning pension expenditures, reported ARY News.

The cabinet with Chief Minister Murad Ali Shah in the chair discussed the reforms to control the pension bill.

The chief minister said salaries of 493,182 employees cost the provincial government Rs23.9 billion every month while the monthly pension bill is Rs13.3bn.

“We have to bring reforms to cut the pension bill,” he stressed, adding if the current system of payment of pension is allowed to stay in place, the pension bill will be bigger than that of salaries in the next decade.

The cabinet was briefed that early retirement will be banned with a minimum of 25 years of service and  55 years of age to be made mandatory for seeking retirement, which will help cut the pension bill by Rs433.3bn.

In addition to that, pension will be determined on a three-year average salary instead of the last received salary, which will reduce the pension burden by Rs348.8 billion.

Family pensions will be limited to immediate family members with a wife, husband or son below 21 years of age to be entitled to pension, which will cut the burden by Rs112.179bn.

The new pension scheme will be applicable to new employees to be recruited after its enforcement.

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