indh govt approves new pension policy, lowers retirement age
Sindh cabinet has approved a pension policy for the province, reducing the age for retirement for the provincial government employees.
According to details, the pension rules 1963 came under discussion during the provincial cabinet meeting headed by Chief Minister Murad Ali Shah and attended by provincial ministers and officials.
Under the new pension policy, it has now been recommended that any employee could be retired from the provincial service after 55 years or on the completion of his 25-year of service.
The meeting also mulled over a rule that allowed pension for the children of a deceased employee upto the age of 24 years and decided to lower the age bar for children to 21-year-old.
Chief Minister Syed Murad Ali Shah while approving the pension rules said that it would help in the timely release of pensions to the employees and would help in resolving the issues faced by the pensioners.
Last year, the Sindh cabinet approved a set of reforms to cut the province’s ballooning pension expenditures. The cabinet with Chief Minister Murad Ali Shah in the chair discussed the reforms to control the pension bill.
The chief minister said salaries of 493,182 employees cost the provincial government Rs23.9 billion every month while the monthly pension bill is Rs13.3bn.
“We have to bring reforms to cut the pension bill,” he stressed, adding if the current system of payment of pension is allowed to stay in place, the pension bill will be bigger than that of salaries in the next decade.
The cabinet was briefed that early retirement will be banned with a minimum of 25 years of service and 55 years of age to be made mandatory for seeking retirement, which will help cut the pension bill by Rs433.3bn.
In addition to that, pension will be determined on a three-year average salary instead of the last received salary, which will reduce the pension burden by Rs348.8 billion.
Family pensions will be limited to immediate family members with a wife, husband or son below 21 years of age to be entitled to pension, which will cut the burden by Rs112.179bn.
The new pension scheme will be applicable to new employees to be recruited after its enforcement.