Increase in Retirement Age Could Save KP Rs. 140 Billion in 10 Years

Khyber Pakhtunkhwa’s (KP) Minister of Finance Minister, Taimur Saleem Jhagra, said that increasing the retirement age of government employees could potentially save the province around Rs. 140 billion in almost a decade.

The Minister said at a news conference,

Although we [the government] have to make other pension reforms, the single decision of higher retirement age will save the province around Rs. 140 billion in around a decade.


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The provincial government moved the Supreme Court against the decision taken by the Peshawar High Court (PHC) while turning down the provincial government’s move to increase the retirement age from 60 years to 63 years. The Supreme Court annulled the verdict taken by the PHC and referred the case to the high court on Thursday so that it could announce the verdict in accordance with the law.

According to Minister Jhagra, the rejection of the government’s retirement age decision will have financial implications.

He revealed that after the retirement age had been increased, the annual pension bill had come down to Rs. 5 billion from Rs. 6-7 billion per month and had ultimately increased the province’s savings by Rs. 10 billion within six months.

However, following the PHC’s decision, the pension bill had been increased to Rs. 7.5 billion per month and it had cost the province Rs. 13 billion in eight months.


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“The pension bill has grown equal to the development budget for the settled districts of the province. This year, the development budget stands at Rs. 104 billion, while the pension budget totals Rs. 86 billion, which is unsustainable,” he said.

While emphasizing the need to increase the retirement age, the Minister said that the provincial government had been the first in the country to reform the pension system and introduce the changes to the Civil Servants Act.



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