Govt Decides to Abolish Existing Pension System
The move is being taken to deflate pressure of pensions on national exchequer
ISLAMABAD: The federal government has in principle decided to abolish existing pension system for new recruitments in the state machinery, while opting for a contributory pension system onward.
The government is mulling to take measures to decrease the burden of mammoth pensions on the national exchequer.
As compensation, the Pay and Pension Commission (PPC) has suggested revising salaries of public servants and bring them at par with the corporate sector. For this purpose, the reviewing of salary structures in corporate sector is underway.
Further, the officials informed that Securities and Exchange Commission of Pakistan (SECP) has established pension funds too.
The public employees will be able to save a portion of savings from salaries in the pension funds to get a monthly profit.
The amount of profit would increase corresponding to the volume of deposits over time.
Meanwhile, PPC has also agreed upon not cutting salaries of in-service employees or slashing pensions of those already retired.
The commission has started preparation of recommendations for the next fiscal budget to introduce reforms in the existing pension system.
