The federal government is considering reducing the retirement age for government employees from 60 to 55 to save Rs. 1 trillion per year in pension bills.
The government thinks this will help reduce long-term pension liabilities by approximately Rs. 50 billion annually, reported Dawn.
While the plan could cut pension payouts by shortening the payment duration, it may also increase higher upfront costs due to severance packages and early retirements.
The federal government’s pension costs have surged more than fivefold over the past decade, from Rs. 164 billion in 2011 to Rs. 988 billion in 2021. Comparatively, tax revenues have increased only 2.7 times.
The reforms also include the introduction of a contributory pension scheme for future employees. Public sector corporations and regulatory bodies may be asked to implement similar reductions in retirement age and fund severance costs independently.
Although the move aligns with practices in neighboring countries like India, Malaysia, and Sri Lanka, where retirement ages range from 55 to 60, concerns remain about the loss of experienced personnel and potential impacts on workforce efficiency.
If approved, the government believes this will help mitigate immediate pension costs in the long run.
Follow ProPakistani on Google News & scroll through your favourite content faster!
Support independent journalism
If you want to join us in our mission to share independent, global journalism to the world, we’d love to have you on our side. If you can, please support us on a monthly basis. It takes less than a minute to set up, and you can rest assured that you’re making a big impact every single month in support of open, independent journalism. Thank you.
This is much less than what top notches are paying to IPPs on acct of CAPACITY payments. At time they plan to increase Retirement age to save on Pension and now reducing age to save on Pension, INTELLECTUAL PLANNERS, WAH GE WAH.
Ok but will any media outlet do some research and compile a list of the retired people who are reemployed by the government, especially from the establishment? If you have to retire the government servants at 55 and reemploy the retired people, and that too with irrelevant professional background plus a much higher salary, better let the retirement age stay as it is.
Its wise decision.that is the need of the hour.
Good decision
Majority government officers are corrupt peoples in every department.
Over a decade, the federal government’s pension costs surged more than fivefold compared with the tax revenues which increased only 2.7 times.
Could we know the corresponding increase in FBR staff payroll and strength.
I agree. I propose all politicians retire at the age of 50. Same for all defence personnel and all provincial and govt. employees. Will they do it? I doubt it.