Government may lower retirement age to 55 to ease pension burden
The federal government is exploring a proposal to lower the retirement age for government employees by five years, from 60 to 55, as part of efforts to address the growing pension burden. This potential reform, reportedly recommended by the International Monetary Fund (IMF), is under review, with officials analyzing its financial and legal implications.
The primary motivation behind the proposed change is to reduce the government’s pension expenditure, which has soared to unsustainable levels. Currently, pension liabilities exceed Rs 1 trillion annually, posing a significant strain on the national budget. By implementing this adjustment, the government could save an estimated Rs 50 billion each year.
Also Read:
Under the existing system, government employees retire at the age of 60 or after completing a maximum of 30 years of service. Pensions are calculated based on the employees’ last drawn basic salary. This arrangement has contributed to the ballooning pension liabilities, making reform a critical priority.
To address long-term pension challenges, the government has already introduced a contributory pension scheme for new recruits. However, experts argue that such measures alone may not suffice, advocating for more substantial changes to effectively manage pension obligations.
Read all the Breaking News Live on pakistantimes.com and Get Latest English News & Updates from Pakistan Times. Follow us on Whatsapp channel for more.
