Finance ministry hiring actuarial services to assess retirement schemes
ISLAMABAD: The Ministry of Finance has decided to hire actuarial services from qualified actuarial firms to assess and determine the Retirement Benefit Schemes liabilities of the federal government as on June 30th 2020.
The federal government has a Defined Benefit (DB) Pension Scheme for all its civil servants. It also has a contributory provident fund scheme besides a post-retirement medical benefits. The scope of work for hired consultant firms include reports for pension, general provident fund and medical schemes of the federal government for both civil and military service for all forms of pension systems applicable whether Contributory Pension Funds or gratuities paid to contract employees. Scope of work also includes policy options for a new Defined Contribution Pension Scheme for the newly hired in the government. The Federal Government employs some 1.36 million individuals in a number of positions. They are sub-divided between the civil government and the military. At present, there are 1.8 million federal pensioners and the total pension bill is approximately Rs500 billion per year. The government employment is largely pensionable service in some form.
The pension scheme for regular civil servants and government servants is a defined benefit scheme. The regular pension system of the federal government is regulated through a number of laws, rules and regulations such as the Civil Servant Act of 1973 and the Civil Service Regulations (CSR) and other statutory instruments. The government recently constituted a Pay and Pension Commission in the Ministry of Finance to review the existing compensation and pension system of the federal and provincial governments to bring improvements by addressing any distortions and by aligning the systems with the international best practices. The Commission needs Actuarial Services to assess viability of the current pension system and to evaluate possibilities of creating an alternative pension system.
