PIA owes Rs40 billion in pension liabilities, retirees warn potential buyers

ISLAMABAD: Pakistan International Airlines (PIA) currently owes around Rs40 billion to its Employees’ Pension Trust Fund, with approximately Rs30 billion already listed as a liability in its December 2022 financial report.

A public notice, issued today by The Aviation Law Firm on behalf of PIA’s senior management retirees, warned potential buyers about these significant liabilities. It highlighted that the Trust funds were improperly used to cover operational expenses, violating Trust regulations.

Additionally, interest on the liability and contributions from a now-merged Defined Contribution fund were not included in the official figures, suggesting the actual liability may exceed Rs40 billion.

In 2024, an extralegal move by the Privatisation Commission of Pakistan and PIA’s leadership transferred Rs20 billion of this liability to PIA-HOLDCO. However, under the PIA Conversion Act 2016, retirement benefits cannot be altered to the detriment of employees or retirees. Moreover, Pakistan’s Trust Fund laws safeguard the investment of Trust funds and the rights of beneficiaries.

A group of retired senior PIA employees has filed a petition with the Lahore High Court, seeking an accurate valuation of the Trust Fund and assurances that their rights and benefits remain intact.

Potential buyers are cautioned that any liabilities associated with the Pension Trust Fund will be transferred to new shareholders.

The notice specifically advises bidders to account for these liabilities in their financial assessments, including provisions for replenishing the Pension Fund and maintaining retiree benefits, such as medical and travel facilities, as required by the PIACL Act of 2016.

The notice concludes by emphasising the importance of carefully considering these obligations to ensure an informed bidding process.

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