Govt seeks review of existing Pay & Pension mechanism

ISLAMABAD: The government on Friday assigned chairperson, Pay & Pension Commission, Nargis Sethi, to review the existing pay and pension mechanism, allowances, perks and possibilities of monetisation in order to have a financially viable solution for public sector employees.

The Pay & Pension Commission, under the chairperson Nargis Sethi, has taken its assignment to come up with a viable solution to raise pay and pension in a sustained manner. The pension bill at the federal level is all set to surpass the annual salary bill, thus posing a challenging situation for the government in the shape of monster of increasing liabilities on the fiscal front.

The government had approved a concept paper to get loan from the World Bank for introducing reforms into the obsolete pension system of the country.

The government intends to come up with a contributory pension system through creation of funds that would be invested to pay the pension liabilities instead of paying pension amounts from national exchequer. The pension bill at the federal level had touched Rs477 billion and after incorporating the provinces, the total pension bill is exceeding Rs1,000 billion on an annual basis.

“Without reforming the public sector, the government cannot afford pay and pension at an existing pace of increasing burden, so the government will have to explore the possibilities for introducing monetisation of perks and privileges” said the official sources, while talking to this scribe on Friday.

Talking to ‘The News’ on Friday, the vice-chancellor Pakistan Institute of Development Economics (PIDE), and renowned economist, Dr Nadeem-ul-Haq said except for a few African countries, there is no concept of providing housing, cars and other facilities to public sector employees. Now, there is monetisation of all perks and privileges of all kinds of facilities and the existing system for providing housing, cars and others should be abandoned once and for all, he added. He said the bureaucracy played a trick while introducing monetisation of vehicles because it was being misused consistently for the past several years.

According to an official statement issued by the Ministry of Finance, the chairperson, Pay & Pension Commission, Nargis Sethi, called on the Federal Minister for Finance and Revenue, Dr Abdul Hafeez Sheikh, on Friday. Nargis briefed the finance minister about the working of the Pay & Pension Commission to resolve the issue of burgeoning expenditure of pensions on the government exchequer as well as anomalies in pay and pension structure.

The finance minister has stressed on the importance of reviewing the existing pay and pension mechanism, allowances, perks and possibilities of monetisation in order to have a financially viable solution for the government employees. During the meeting, the chairperson apprised the finance minister about the working of the sub-committees and reiterated her commitment for streamlining the prevailing system of pay and pension based on principles of fairness and transparency.