Pakistan Businesses Forum (PBF) has said that a rapidly increasing pension bill is a far more serious problem than the huge power-sector debt. In a statement on Sunday, PBF Vice President Ahmad Jawad said the time is not far when the ballooning pension expenditure will become the country’s biggest budgetary challenge.
He unfolded the details that the consolidated federal and provincial governments’ pension bills have grown over six fold, from Rs164 billion in FY2011 to almost Rs1 trillion in FY2021, even before accounting for state-owned enterprises’ (SOEs) retirement liabilities.
In the same period, consolidated revenues have increased less than three times. Consequently, retirement payments as a percentage of the consolidated revenues have grown from 7 percent in FY2011 to around 17 percent presently.” It’s time the state must look to reduce its obligations by shifting from defined benefit to defined contribution pension plans.
