[vc_row][vc_column][vc_column_text dp_text_size=”size-4″]In the next federal budget for fiscal year 2023–2024, the government is anticipated to raise civil worker pay by up to 30% through ad hoc allowances and pensions by 20%.
The Pay and Pension Commission has advised the government to take into account increasing medical and transport benefits for government employees by 100% as well as ad hoc benefits by 10%.
But according to sources at the Ministry of Finance’s Regulation Wing, three proposals for pay raises and pension hikes had been drafted and will be submitted at a special cabinet meeting presided over by Prime Minister Shehbaz Sharif. The gathering will choose the final increments, and the chosen proposal will then be submitted to parliament with the budget.
The first plan, in keeping with the Pay and Pension Commission’s suggestion, offers a 100% ad hoc increase in medical and transport benefits for employees. Additionally, it has been suggested to increase the allocation by 10%. Additionally, medical benefits may grow by 100% and pensions by 10% for retired personnel.
Accepting the idea, according to the Pay and Pension Commission, would not increase the government’s pension costs, and the International Monetary Fund (IMF) would not protest.
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Additionally, the workers would feel a great deal of relief.
The second plan seeks to increase medical and travel benefits together with the pay of all government workers (grades one through 22) by 25%. Along with a 15% increase in pensions, the medical allowance for retirees would also rise.
The third plan under discussion calls for a 20% pay rise for officers in Grades 17 and above and a 30% pay increase for employees (grades one through sixteen). Concurrently, a 20% rise in the medical allowance for pensioners and a 50% increase in the medical and conveyance allowances have been recommended.
Additionally, plans to raise the minimum wage for employees and the pensions of retirees from the Employees’ Old-Age Benefits Institution (EOBI) are being taken into consideration.
The government has the final say, even though the Ministry of Finance acknowledges that the Pay and Pension Commission’s recommendations are appropriate.
The recommendations of the panel were unable to be carried out in the previous fiscal year, according to sources in the finance ministry, because the report’s conclusion was delayed. Despite receiving the report ahead of time this year, the election’s inclusion in the budget makes it harder to put the commission’s recommendations into practise.
The high pension cost and the anxieties of financial organisations, notably the IMF, are highlighted in the commission’s findings. The commission advises replacing the current pension scheme for newly hired employees with a contributing or voluntary pension programme as a remedy.
According to the sources, Khyber-Pakhtunkhwa (K-P) government personnel already have a voluntary pension system in place, and the Securities and Exchange Commission of Pakistan (SECP) has approved four voluntary pension system (VPS) fund schemes for them.
Two pension fund managers in K-P will offer the Trust Deeds of Pension Fund Schemes to government employees after receiving the No Objection Certificates. As trustee for these monies, The Central Depository Company of Pakistan Limited will act. The VPS is available to all adult Pakistanis who possess a Computerised National Identity Card (CNIC).
Employees and self-employed people are both eligible to contribute to the VPS under the Voluntary Pension System Rules, 2005, assuring a steady income after retirement.
The SECP highlights that a combination of employee and government payments will be used to finance these new pension plans. The funds will be administered by pension fund managers registered with the K-P government and licenced by the SECP.[/vc_column_text][/vc_column][/vc_row]
