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November 27, 2020

Adviser tasks pay and pension commission to plug Rs1.5trln leakages

Business

November 27, 2020

ISLAMABAD: The government is expecting the newly- reconstituted pay and pension commission to bring up financially-viable solutions to offset Rs1.5 trillion annual drain from the exchequer, finance adviser said on Thursday.

Adviser to the Prime Minister on Finance and Revenue Hafeez Sheikh expressed confidence that the pay and pension commission would come up with a financially viable solution to streamline the basic pay scales of government employees, admissible allowances and pensions.

“The commission will follow a consultative process to resolve the burgeoning expenditures on the government exchequer,” said Shaikh. “The current model for disbursement of pay and pensions is not sustainable.”

Finance adviser was addressing the inaugural meeting of the pay and pension commission 2020. The commission is headed by Nargis Sethi and is composed of senior professionals from the public and private sectors and federal and provincial secretaries, Kashmir and Gilgit Baltistan and other senior officials of all the governments.

Shaikh assured the commission his support. “The government is willing to consider commission’s recommendation even prior to the finalisation of the report,” he said.

Sethi, chairperson of the commission told the meeting about the rationale and mandate of the commission.

“The commission will review the existing pay and pension structures, allowances, perks and facilities and also evaluate possibilities of their monetization,” she said.

Sethi outlined formation of sub-committees, which have been assigned terms of reference to deliberate on prevailing pay and pension system across the country.

“The success of the commission is dependent on provision of reliable and authentic data in a timely manner from all concerned,” she added.

The pay and pension commission has kick-started its formal deliberations to finalise its recommendations as the incumbent regime intended to revise pay and pension for public sector in the upcoming budget.

For new employees coming into fold of the public sector, the pay and pension commission would finalise its recommendations for placing contributory pension. The pension bill has become a real monster where the obligation of the federal and provincial governments had already surpassed the Rs1 trillion mark on annual basis. At the federal level, the pension bill stood at Rs470 billion for the current fiscal year. The pension amount is being paid through national exchequer while in modern world the pension funds are being run to pay the pension amounts.

First the employees contribute into pension funds then the funds are invested and pension liabilities are discharged through earned profits of investments.