Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb announced that the government plans to implement pension reforms as part of its strategy to enact structural changes, preceding the finalization of a new agreement with the International Monetary Fund (IMF).
Speaking to the media on Tuesday, the finance minister, accompanied by Federal Law Minister Azam Tarar and Information Minister Atta Tarar, emphasized the necessity of regulating pension expenditures.
Aurangzeb suggested that extending the retirement age should also be considered.
Aurangzeb emphasized that ‘age is now just a number. 60 is the new 40.’ He cited his previous experience as CEO of Habib Bank Limited, where they raised the retirement age from 60 to 65, recognizing these years as productive. He highlighted the need to revise the service structure to control pension expenditures.
In the fiscal year 2023-24, Pakistan allocated Rs801 billion for superannuation allowances and pensions, showing a 31% increase from the previous year’s Rs609 billion budget.
Federal Law Minister Azam Nazir Tarar stated that pension reforms would be comprehensive and require legislation. He emphasized the significant portion of yearly revenue allocated to retirement benefits and pensions, mentioning the need for legislation across civil servants, armed forces, and judicial and executive organs.
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Tarar disclosed the formation of a committee under the finance minister’s chairmanship to propose pension reform recommendations. He assured that once finalized, these recommendations would be shared with the public.
Regarding the recent visit of the Saudi delegation to Pakistan, Aurangzeb expressed confidence, describing it as a positive development. He reiterated the government’s commitment to moving in the right direction.
Aurangzeb highlighted the upcoming crucial talks with the IMF mission, focusing on structural reforms. These reforms include increasing the tax-to-GDP ratio, energy sector reforms, privatization of State-Owned Enterprises (SOEs), and reducing non-development expenditure.
He praised the Public-Private-Partnership model adopted by the Sindh government, suggesting its implementation at the federal level. Aurangzeb stressed the government’s intention to boost the country’s economy with support from the private sector.
