- Web Desk
- 1 Hour ago

Establishment Division opposes proposed pension reforms
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- Web Desk Shahzad Paracha
- Jan 21, 2024

ISLAMABAD: The Establishment Division has raised serious reservations to the proposed changes in the pension system for retired public servants, saying that they will put the government employees at a disadvantage.
The Establishment Division has sent its feedback to the Finance Division on the proposed changes, which are aimed at reducing the growing burden of pension payments on the national budget.
The Finance Division has suggested that the government employees should receive a gross pension based on 70% of the average pensionable emoluments drawn during the last 36 months of service. However, the Establishment Division has argued that this will adversely affect the employees who get promoted in the last year of their service, as they will not get the full benefit of their higher salary scale in their pension calculation.
For instance, if a government employee is promoted to grade 18 in the last year of his or her service, he or she will get a lump sum pension of 70% of the average of 24 months of grade 17 salary and 12 months of grade 18 salary. This will result in a lower pension than the employee would have received based on the last last promoted scale (grade-18 salary, for example).
The Establishment Division has also pointed out that the proposed formula will lower the average value of the pensionable emoluments, as it will include the lower salaries of the previous years. This will further reduce the pension amount for the government employees.
The Establishment Division has also questioned the draft notification regarding the 3% reduction in pension amount as a penalty for early retirement, saying that it needs to be based on empirical evidence. It has said that there may be valid reasons for some government servants to opt for early retirement, and they should not be punished for their decision.
The Establishment Division has also stated that the draft proposal regarding the annual increase in pay is irrelevant to the proposed notification, and should be removed from it.
The Establishment Division has proposed an alternative option to reduce the pension liabilities, which is to increase the retirement age from 60 to 62. It has urged the Finance Division to consider this option, as it will avoid the negative impact of the proposed pension reforms on the morale of the government employees.
The Pay and Pension Commission has recommended the changes in the pension system for government pensioners, in view of the rising cost of pensions, which is expected to exceed Rs1 trillion in the coming years.
The ministry of defence has also expressed reservations over the pension reforms, as it has reportedly asked the Finance Division not to discriminate against the retired armed forces personnel.
A senior government official, who requested anonymity, said that the government should implement performance-based and task-based promotion for government employees, also known as accelerated promotion, if it is serious about reforms.
He argued that rewarding good performing employees with higher salaries would enhance the overall performance in government departments.
He lamented that junior officers, who work hard and excel in their tasks, are often overlooked for promotions, as they depend on the seniority or retirement of their superiors.
He said that most of the senior public servants have secured their positions by virtue of their service length and not their performance, and there is no mechanism to hold them accountable for their promotions. He said that the Departmental Promotion Committee’s meetings are mere formalities and even the worst-performing public servants get promotions.
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He said that a government employee dedicates most of his or her prime time to serving the government and expects protection in the form of pension, which is the only saving of the public servants. He said that if the government is resolved to reduce the pension liability, it should either use performance as the criterion or make substantial increase in monthly salaries so that government employees could save some money from their incomes for their future and post-retirement life. The government servant, who is in grade 19, said that in the private sector, an employee equivalent to his grade earns more than Rs1 million monthly salary while he barely gets Rs0.160 million. He wondered how he could save for the future from this salary given the soaring inflation and other expenses. He said that pension is the only hope for the government servants, which should not be snatched from them.
