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August 22, 2019

PM forms body to examine proposal to increase retirement age

Top Story

August 22, 2019

ISLAMABAD: Prime Minister Imran Khan has constituted a seven--member committee to examine a proposal to increase the retirement age of civil servants, but it has its own pitfalls and consequences.

An official notification issued by the prime minister’s office directed the committee to come up with a recommendation whether the proposal is feasible or not, and if so, suggest the way forward for its implementation--how, when and scope (whether to implement across-the-board or selectively).

The committee was asked to submit its recommendation for consideration of the prime minister in three weeks. Its terms of reference include examination of the proposal of increasing the age of retirement keeping in view its aspects relating to legal, financial, administrative, organizational efficiency and economic, including, if any, on job creation prospects.

To be headed by the adviser to the prime minister on institutional reforms, the forum includes secretaries of finance, establishment, defence and law and justice; and auditor general of Pakistan. A finance ministry joint secretary will act as its secretary. Sometime back, a similar proposal was sent to the Punjab and Khyber Pakhtunkhwa (KP) governments. The KP administration enforced it by enacting a law, but the Punjab government did nothing on it.

A senior bureaucrat explained to The News on condition of anonymity the advantages and downsides of the proposal. He said that such plans were floated in different countries by the World Bank to reduce the rising pension liabilities. The Sindh government alone, he said, is annually paying some Rs40 billion as pensions.

He felt that senior bureaucrats, who, otherwise, were not performing now for a variety of reasons, would show efficiency and good speed in making this proposal approved. The official said the Civil Servants Act has to be amended to increase the retirement age and it was obvious that the ruling coalition has no majority in the Senate to do so.

A window of opportunity, he said, available to the government to implement this proposal was to incorporate it in the last Finance Act, but it chose not to do this. If it wants to opt for this trajectory, it will have to wait for the finance act, he said.

He pointed out that the KP government successfully increased the retirement age because it made a law for having majority in the provincial assembly. The ruling party can execute this kind of plan in Punjab as well where it has majority in the provincial assembly.

The official said that before examining such a proposal, an actuary study was must, which has not been got carried out in the instant case. Such study, which takes a lot of time, throws up future financial benefits and disadvantages and establishes whether there will be any positive effect of this plan, he said.

Another aspect, the official said, is that the government complains that the senior echelons of bureaucracy are not cooperating and functioning and were reluctant to work on its reforms agenda. When this is the official conclusion, how retaining the “deadwood” for more years in service will be productive, he asked.

Moreover, the official said, when the private sector is not generating jobs and raising the retirement age of civil servants will curtail job opportunities for young men, how the government will translate its promise of providing five million jobs into reality. He said that the availability of commutation facility, seeking early retirement after a certain period of service also piles up financial burden on the government.

A few days before the KP administration made a law to raise the retirement age in July this year, a report in this paper said that at least 30,000 educated young men have been deprived of government jobs in the next three years instead of making any plan to provide them jobs. The proposal will result in increase in the ratio of jobless people in KP during this period.

The retirement age was increased to 63 years from 60 years in KP. According to official estimates, every year about 10,000 government servants retire. Keeping this in view, as many as 30,000 government employees are not going to retire in the next three years, thus depriving the young educated people of opportunities to get employed in the government departments.

The decision would also create problems in promotion of government employees. While nearing retirement age, the government employees draw maximum salaries, and the new entrants are hired for lesser salaries.