Pakistan Government Considers Lowering Retirement Age to Cut Pension Expenditure
In an effort to tackle the growing pension burden, the federal government is reportedly considering a proposal to reduce the retirement age for government employees by five years, from 60 to 55.
The proposal, which is believed to have been suggested by the International Monetary Fund (IMF), is currently under review as authorities assess the financial and legal implications of such a move. The primary goal is to address the escalating pension expenditure, which has seen a significant surge in recent years.
Read More: Government Implements Significant Reforms to Pension Policy
Sources suggest that if this change is implemented across all government institutions, it could potentially save the government up to Rs 50 billion annually. At present, government employees receive a pension based on their last drawn basic salary once they retire at the age of 60, or after serving a maximum of 30 years.
The pension liabilities have grown alarmingly, now surpassing Rs 1 trillion annually. While the government has already introduced a contributory pension scheme for future employees, experts argue that more drastic measures are necessary to control the increasing pension expenses.
