ISLAMABAD: The plight of pensioners belonging to Pakistan Railways, the largest state-owned enterprise, continues and it is feared that not all the pensioners will be able to get their already-delayed monthly pension this month since the finance ministry has not released the full amount for payment of pension.

Sources privy to the railways ministry told Dawn that the finance ministry had been requested to allocate Rs48 billion for annual expenditure against pensions, but Rs42bn was released, out of which Rs36bn had already been given to the pensioners.

The sources feared that Pakistan Railways (PR) would face financial difficulties in the coming months for paying pensions to retired employees and widows unless the finance ministry released the remaining amount.

Government has already turned down a proposal for establishment of pension fund

According to the sources, the railways ministry has been in parleys with the finance ministry to take over the payment of pension to railway employees like other government departments and civil servants. However, no decision has so far been taken in this regard.

The railways secretary had written a letter to the finance ministry on March 1, requesting for transfer of PR pension payments to the Controller General Accounts and Auditor General of Pakistan Revenue. The letter further stated that the pension payment roll was ready for transfer of pension on March 1. However, the pertinent account of pension has insufficient credit balance, and the finance ministry remains unresponsive.

The letter to finance secretary stated that the matter related to around 125,000 PR pensioners and warned that the situation might lead to unrest amongst the pensioners which could be embarrassing for the government. A delay in pension payment will also be in violation of the Supreme Court orders.

“The Ministry of Railways had submitted a request of Rs4.500 billion to the Finance Division for release of funds which has not been conceded by the Finance Division in lieu of the release strategy,” the letter said.

While the ministries of railways and finance are yet to reach to a decision, the pensioners, particularly low-paid and widows, continue to face difficulties in getting pension on time. It is learnt that two commercial banks authorised for the payment of pensions have not yet received scrolls for payment.

According to Prime Minister’s Assistance Package for Employees of Pakistan Railways, funds have been released and pensioners will be able to get pension, but due to official holidays all banks are closed, hence payment will only be possible when the banks reopen.

The railways ministry had proposed to the finance ministry to make arrangements for payment to pensioners directly like other civil servants, but the latter has yet to take a decision on the proposal.

The government has already turned down a proposal for the establishment of Pakistan Railways Pension Fund. In this regard, an international firm hired by Pakistan Railways had submitted its proposals, designing the implementation mode for the establishment of the pension fund.

The purpose of establishing the fund was to shoulder future expenditure on pension of employees. Much delay has occurred in the establishment of the pension fund due to which no pension reserve has been created until now. The absence of any credible estimate of pension liabilities has also hindered possible reforms to rationalise increasing impact of pension expenditure on PR’s annual budget.

Pakistan Railways runs its Defined Benefit (DB) Pension Scheme on a ‘Pay-As-You-Go’ (PAYGO) basis. In the absence of any pension reserve, the federal government is currently shouldering pension expenditure of Pakistan Railways.

Published in Dawn, March 22nd, 2022