Government hints at raising retirement age to control pension expenses.
In a bid to address the fiscal challenges posed by its pension system, Pakistan is contemplating significant reforms, with Finance Minister Muhammad Aurangzeb advocating for raising the retirement age as a key measure.
During a press conference in Islamabad, Finance Minister Aurangzeb highlighted the urgency of reforming the country’s pension system, stating that it was imperative to adapt to changing demographics and economic realities.
He emphasized the notion that “age is just a number,” asserting that individuals remain productive well beyond the traditional retirement age.
Drawing from his experience in the private sector, Aurangzeb noted that extending the retirement age from 60 to 65 resulted in enhanced productivity and the retention of valuable expertise.
“Sixty is the new 40. In the [private sector] institution I left before coming here [as finance minister], we raised the retirement age from 60 to 65. These are your most productive years when you have maximum experience.”
Echoing Aurangzeb’s sentiments, Law Minister Azam Nazir Tarar emphasized the need for legislative action to support pension reforms.
Tarar highlighted the intricate link between political stability and economic prosperity, asserting that the adoption of pension reforms should be a bipartisan effort in Parliament.
World Bank has acknowledged Pakistan’s commitment to economic reforms and reiterated its readiness to extend technical assistance and financial support to facilitate the country in achieving its developmental objectives.
In a meeting, Finance Minister Muhammad Aurangzeb briefed… pic.twitter.com/7BNahX9JBx
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To facilitate the reform process, a committee has been established to review various proposals regarding pension reforms.
Tarar assured transparency and public engagement in the decision-making process, affirming that all decisions would be shared with the public.
As Government hints at raising retirement age to control pension expenses, the proposed pension reforms signal a proactive approach by the Pakistani government to address fiscal challenges and ensure the long-term sustainability of its pension system.
With demographic shifts and economic dynamics in play, these measures aim to strike a balance between fiscal responsibility and the welfare of retirees.
