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Taimur Jhagra: The world has done it, we can do it!

In the last 13 years, Pakistan has incurred more than 7 times jump in its pension bill which makes up 650 percent increase in pension bill

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Pakistan cannot progress unless its pension system is adequately supported; Khyber Pakhtunkhwa leads the way in approving the Contributory Pension System for all new government employees. Finance & Health Minister, Pakhtunkhwa, Taimur Khan Jhagra referred Pakistan’s pension problem as “an elephant in the room; worth Rs 1.2 trn & growing at over 20% per year!”

Moreover, he emphasized on the adoption of the same system by other provinces as well.

In the last 13 years, Pakistan has incurred more than 7 times jump in its pension bill which makes up 650 percent increase in pension bill.

Read more: Good news for government employees

He added that these are two hard realities to ensure we understand the gravity of the situation. Without reform, no employee joining now, or even in the previous ten years, should expect to retire with a pension.

He clarified that without reform, today’s pensioners, as well as those who join the pension net in the future under the current defined benefits scheme, should not be shocked if their pensions are threatened within ten years; at most.

He proudly announced KP under Chief Minister Mahmood Khan is the pioneer government in Pakistan to establish a specified contribution pension program for new employees. This is on the back of 4 years of pension reform. He closed the thread by saying, “we are paying for the excesses of yesterday. Let us not burden the future.”

PTI also shared his speech on Twitter regarding the KPK pension scheme.

He said that one of the reasons why KPRA performed well is that it became their pilot engagement to introduce performance-based pay. “It is not a coincidence that in three years in which revenue numbers have increased, they have had a performance-based pay framework,” he added. He encouraged all to adopt the system by saying, “the world has done it, we can do it!”

Mr. Jhagra stressed on the pension schemes in Pakistan prevailing since years but not being fruitful. “We create a public sector where people want to come in but we know that its not sustainable. Change from 13 to 6 levels!” There is a mismatch between what the employee contributes and in return what the government contributes, for instance, if it is 10 percent from employee side then government is paying 12 percent from its side.

Read more: Pakistan’s Unsustainable Pension Bomb

At the end he said, “why is it that when something is so urgent and on such a burning platform that we don’t actually take the decisions to reform it? I am proud that KPK does!”

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