In a bid to reduce the mounting pension burden, the federal government is reportedly considering a proposal to lower the retirement age for government employees by five years.
In a move aimed at curbing the rapidly escalating pension expenditure, the government is considering lowering the average retirement age from 60 to 55 years.
The proposal, reportedly suggested by the International Monetary Fund (IMF) is still under review with the federal authorities weighing its potential financial and legal implications.
The primary objective behind this decision is to reduce the pension expenditure, which has surged to alarming levels in recent years.
According to sources, this move could save the government up to Rs 50 billion annually if implemented across all government institutions.
Currently, government employees are entitled to a pension based on their last drawn basic salary at the age of 60, or, in certain cases, after serving a maximum of 30 years.
This arrangement has contributed to the ever-increasing pension liabilities, which have now crossed Rs1 trillion annually.
The government has already introduced a contributory pension scheme for future government employees, but experts argue that a more drastic approach is required to contain the swelling pension bills.
