Taking into account the long-term financial implications of pension payments, retired Justice Maqbool Baqar, the caretaker Chief Minister, directed the finance department on Wednesday to introduce comprehensive pension reforms aimed at relieving the fiscal burden on the provincial exchequer.
Chairing a meeting of the finance department, he also emphasized the need to identify and remove ghost pensioners from the system, noting that pension expenditure currently accounted for a substantial 14 percent of the current revenue expenditure, a figure deemed excessive.
He further instructed that deputy commissioners conduct public hearings in collaboration with the finance department to verify pension cases, ensuring transparency and accountability in the process.
In 2021, the provincial government, led by the Pakistan Peoples Party, had already approved pension reforms during one of its cabinet meetings. The motivation behind these reforms was to preempt a scenario in which the pension bill could surpass the salary bill within the next decade if post-retirement liabilities continued unchecked.
Caretaker CM Baqar suggested a system wherein government employees contribute a modest portion of their salaries to a pension fund, which would then be invested strategically to mitigate the burden on the government exchequer.
Additionally, he urged the finance department to implement reforms within the treasury system, as delays in pension disbursements had been reported.
In terms of financial distribution, the caretaker CM noted that the federal rate stood at 42.5 percent, with the provinces collectively receiving 57.5 percent from the divisible pool. He highlighted the specific shares for Punjab, Sindh, KP, and Balochistan.
Within the total provincial budget of Rs2.282 trillion, Baqar observed that 17.7 percent was attributed to current revenue expenditure. This segment comprised 38 percent allocated to salaries, 14 percent to pensions, 23 percent to grants, and 25 percent to other expenditures.
To combat corruption and eliminate ghost pensioners, the CM insisted on treasury reforms. He pointed out that corruption complaints had been on the rise within treasury offices, affecting the release of pensions. In some cases, ghost pensioners were fraudulently receiving pension payments.
In response to these challenges, the CM directed the finance department to introduce automation across all treasuries, ensuring efficient and transparent digital systems for timely pension disbursements and other payments.
The finance secretary assured the CM that an automation system would be implemented to address these issues.
Additionally, during the meeting, the caretaker CM was apprised of the need for an additional Rs30 billion to meet the increased funding requirements of local councils, following a 50 percent boost in their monthly share.
