Sindh approves Pension Reforms

June 5, 2021

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The Sindh Government has approved the pension reform plan taking into consideration the importance of pension payment and future financial implications, as the reforms are expected to save approximately Rs. 894.4 billion in coming ten years, otherwise the provincial government’s Pension expense will exceed the Salary Expense.

A provincial cabinet meeting was held with the Chief Minister Murad Ali Shah on Friday where it was informed that the number of government employees amounted to 477,570 in 2012 and their monthly salaries and pensions expenses were Rs 11.78 billion and Rs 6.523 billion respectively. In 2020, the number of employees increased to 493,182 and a monthly salary expense rose to 23.97 billion rupees while pension expense rose to 13.329 billion rupees.

He said that if the same trend of pension increase continued, then the Pension Expense will exceed the salary expense of the province in the next ten years.

Hence, a reform study was conducted to introduce the necessary reforms to reduce the pension expense.
Murad Ali Shah said that early retirement (at least 25 years of service and 55 years of service) has been proposed and suggested decreasing the pension according to the number of years of service.

Speaking of another reform, the Chief Minister said the pension should be obtained on the basis of the last 3 years average salary instead of the last salary obtained. Speaking of the family pension, the Prime Minister suggested that it be restricted to family members only. The family pension must be limited to the husband/wife/son (under 21)/daughter (until marriage).

The Cabinet of Sindh approved the proposed pension reforms in principle and appreciated the efforts of the Chief Minister of Sindh in introducing the reforms.