Flattening the Government Pensions Curve; Making them Sustainable

Prime Minister Imran Khan while chairing a cabinet meeting on August 28 th , 2020 has said that the burden of pensions was fast becoming unsustainable and directed Finance Ministry to include eminent international experts in the Pay and Pension Committee to professionally evaluate the best available options8. Most of the countries around the world have pension systems which are intended to provide income support to those persons who have either lost earnings due to old age or become disabled due to some incident. Each pension scheme must result into adequate resource provision to meet the basic living standards and decreases difference in pre and post retirement earnings. This would help pensioners live a decent standard life post retirement as ability to earn reduces post superannuation. Funding these pension schemes can be through either forced savings or contribution by employers (including governments). Some argue it’s the sole responsibility of the individual vis voluntary savings or the family vis family contributions or the State. However on thing is certain that changing demographics in terms of an ageing = population, weaker family support, increase health services and higher expected lives have created need for policy response to be dynamic.