Khyber-Pakhtunkhwa Government Amends Pension Policy

The government of Khyber-Pakhtunkhwa has recently decided to make changes to the pension policy. These amendments will be made for the third time, ever since the current government came into power. The reason behind the change is to alleviate the financial burden on the province. 

Thus, relevant authorities have come up with a 17-point policy. As per this policy, the salaries of newly appointed government employees will be reduced. The amount deducted will automatically be transferred to the Contributory Pension Fund. The workers of the Pakistan Administrative Services, as well as PMS officers, have given their consent to have 20% of their salaries deducted and donated towards the pension fund. 

Taimur Saleem Jhagra, the Minister for Finance, took to the micro-blogging website, Twitter, to reveal that in the last 17 years, the pension in K-P has risen by 95 times its size. In 2003, he revealed, the total size of this pension was around Rs. 870 million but has gone up to Rs. 83 billion in this fiscal year. 

Previously, the pension fund was only 1.13% of the overall budget but has significantly grown to 13.4% in the current year. Jhagra claimed that if measures are not taken to bring this figure down, it will exceed the financial resources assigned to the province in the next six years. 

He added that in the years 2030, the predicted amount of the pension is Rs, 460 billion, given that there has been an increase of 22% in the people employed in the public sector in the last five years. Jhagra went on to clarify that pensions before reforms were given out on 13 levels, which included sons, widows, daughter in law, unmarried daughters, granddaughter, orphan grandson, brother, widowed sisters, mother, and father. 

According to him, every year at least 5,000 employees retire when they hit 45 and are granted complete pension benefits. Moreover, these people also begin working in the private sector and that adds to the burden on the provincial exchequer. 

The Finance Minister also claimed that a sum of Rs. 1,000 billion will be required in the future to pay off all such pensions. He added that the number of children, who are eligible to receive pension, will also be reduced after taking into account the best international practices. He stated that any amount saved will be contributed towards increasing the pension allotted to widows by 75 to 100%.