The government has almost finalized the reforms in the current pension system on the pressure of the International Monetary Fund(IMF), which has been asking the government since long for the reduction of pension expenditures, which has come to the level of the monthly salary bill of the government employees.
The new reforms might be announced by the finance minister in his budget speech next month. The new pension rules would be implemented with effect from 1st July, i.e. beginning of next financial year.
The process of bringing new pension rules was started some four years ago , during the PTI’s government, but it had postponed the matter in the wake of protest by the pensioners as well as the representative bodies of civil employees.
Then the caretaker government came into power and it worked a lot on the pension reforms and now the PML(N) led coalition government decided to introduce them.
Earlier the pension was calculated on the last basic salary drawn by the retiring employee but after the pension reforms is implemented, the pension will be calculated on the average basic salary during the last 36 months drawn by him, which would cause la great lose to the senior government employees, who are going to retire within next one or two years.
Another amendment in the pension calculation would also hurt the interest of government servants that currently 35 percent of his total pension is paid to him as commutation in lump sum form and remaining 65 percent is paid on monthly basis as pension. But after introduction of new rules, the government employee would get only a portion of 25 percent of his total pension, which would be paid to him as commutation while 75 percent would be given to him as a monthly pension.
The government servants mostly utilize the commutation amount either for arranging weddings of their children or buying a house to provide a shelter to their family members. But after reduction in the amount, the retired government servants would find themselves in great trouble in fulfilling their social obligations due to the limited amount in their hand amid high inflation.
For the new employees, a contributory pension system would be brought under which a certain amount would be deducted from the salary of each government employee as contribution towards pension on a monthly basis like G.P. Fund. When the civil servant would go on retirement, the total amount given by him during entire service as the pension contribution would be calculated and after adding interest with fixed percentage on it, would be paid to the government servant on retirement.
Those retired government employees who are already getting pension, would not be much affected by the new pension scheme, except this that the government has put a restriction in proposed upcoming pension rules that the pensioners would not be given an increase in pension more than 10 percent every year.
The new reforms would be on par with the financial murder of the old aged pensioners. The government should reduce the expenses incurred on the extra lavish lifestyle of the ruling class on the cost of national exchequer, while it should curtail the provision of free petrol, medical facilities, free of cost electricity and natural gas and foreign trips to the federal ministers, state ministers, parliamentary secretaries and members of the parliament to lessen the burden from the economy, instead of snatching the last loaf of bread from the mouth of poor pensioners.