PESHAWAR: The Khyber Pakhtunkhwa finance department has proposed a three-year increase in government employee’s retirement age to cut down the province’s increasing pension liabilities. Officials in the establishment and finance department told Dawn that the proposed move would increase the service tenure of the provincial government’s employees from 60 to 63 years.

A senior government official told Dawn that every year, around 10,000 employees retire on average and the move will save the provincial government for paying huge pension bill of about 30,000 employees in first three years.

The budget documents show that the province’s pension bill had valued Rs2 billion in 2002 but it currently comes to Rs60 billion after a whopping increase of 2,900 percent.

Officials in the finance department fear that if the pension bill is allowed to swell at the current pace, then it will leave the province without financial space in the next 20 years.

They said internationally, there were two types of pension programmes: one wherein the employees and government both contributed monthly to a fund and at the end of their career, the employees collected a lump sum amount and went home.

“In other system, the government deducts certain amount from serving employees and pays it to the retired personnel,” the official said.

However, Pakistan lacked both the systems and government has to shoulder the entire pension burden, which was ballooning with each passing day. Currently, the number of KP pensioners stands at 145,000 with an annual increase of 10,000.

However, officials pointed out that due to liberal pension policy, the system didn’t eliminate even 500 pensioners every year.

The official documents available with Dawn show that the provincial government goes on paying pension to 12 relatives after the death of original pension holder. According to them, following the death of pension holder, spouse is entitled to receive reduced share pension for the life time. After the mother death, unmarried daughter is entitled for pension for lifetime, while son can receive pension until 24 years.

In case a person having a widow daughter, the pension amount would be split among the siblings. The list goes on and on as wife of deceased son or his children, father, mother, brother, unmarried sisters and widow sisters are also allowed to draw the pension after the death of the pensioners.

The officials said the government was working on proposals to curtail that long list to reduce the burden on exchequer.

When contacted, finance secretary Shakeel Qadir Khan said his department had moved a summary about increase in the government employees’ retirement age to the chief minister for approval. He said after the chief minister’s nod, the summary would be placed before the cabinet for approval before it was tabled in the provincial assembly for necessary changes to the Civil Servants Act, 1973, for action on it.

The secretary said that upper age limit of 60 years was fixed in 1973 but since then, the life expectancy had increased due to developments in medical sciences and healthcare and therefore, increase in upper age limit for retirement was necessary.

“Life expectancy in Pakistan stood at 55 years in 1973 but now it is 66 years suggesting that the people can now work for more years,” he said.

The secretary said the global retirement age was 65 years.

Published in Dawn, December 12th, 2018