Power division asked for cost-effective solution to pensions

ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet on Wednesday directed the power division to deliberate further and present options for cost optimisation regarding pension liabilities of surplus employees of closed power plants.

Power division presented a summary for a one-time grant to power generation companies for onward payment to distribution companies regarding the actuarial value of pension and pensionary benefits of surplus employees and also taking over the liability for payment of pension to existing pensioners of power plants which were decided to be closed immediately by the cabinet committee on energy.

Minister for Finance, Revenue, Industries and Production Hammad Azhar presided over the ECC meeting.

Power division planned to accommodate employees of closed power plants in power distribution companies and proposed more than Rs14 billion for onward payment to discos in accordance with the actuarial value of pension and pension benefits of employees.

The Cabinet Committee on Energy in September last decided to shut down certain state-run power plants having an aggregate capacity of 1,798 megawatts.

That created a problem related to how the salaries of 1,937 employees and pension of 2,268 pensioners would be paid.

The government estimated more than Rs3.1 billion on account of pension to the pensioners for the last fiscal year.

It was proposed 1,806 employees could be accommodated in discos if power companies made one-off payments to power generation companies.

The remaining 131 employees would be retired or hired on contract.

Actuarial valuation of pension benefits of employees (proposed to be adjusted in Discos) is Rs 14 billion as on June 30, 2020 that will be subject to adjustment.

The ECC further approved technical supplementary grants Rs330 million for the ministry of defence for the maintenance of aircraft, Rs2.3 billion for the ministry of federal education and professional training, Rs1 billion for the finance division to refund the balance amount of funds of Insaf Imdad Ehsas program, Rs382.2 million for the ministry of energy for completion of development schemes

of Sindh and Balochistan under public sector development program, Rs150 million for the ministry of housing and works for funding civil works on different schemes in Balochistan under PSDP, Rs30 million for the board of investment for different operational expenses, and Rs280 million for the ministry of information technology and telecommunications for consultancy and implementation of internet voting.