Finance Minister Muhammad Aurangzeb has announced that the government is set to introduce pension reforms as part of a broader strategy to implement structural changes ahead of signing a new agreement with the International Monetary Fund (IMF).

The proposed reforms aim to bring pension expenses under control and extend the retirement age, reflecting a shift in societal perceptions about aging.

Speaking at a joint press conference alongside Federal Law Minister Azam Nazir Tarar and Information Minister Atta Tarar, Aurangzeb highlighted the need to manage growing pension costs.

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He suggested that raising the retirement age is a key component of the reforms.

“Age is now just a number. 60 is the new 40,” Aurangzeb remarked, pointing out that many individuals remain productive well into their 60s.

He cited his previous role as CEO of Habib Bank Limited (HBL), where the retirement age was increased from 60 to 65, illustrating the benefits of extended career longevity.

To address the rising pension expenditures, Aurangzeb stated that changes to the civil service structure are needed.

In the fiscal year 2023-24, Pakistan allocated Rs801 billion for superannuation allowances and pensions, representing a 31 per cent increase from the previous fiscal year’s allocation of Rs609 billion.

Federal Law Minister Azam Nazir Tarar noted that implementing pension reforms would require legislation, as it impacts a wide range of sectors, including civil servants, armed forces, judicial organs, and executive branches.

Tarar added that a committee has been established under the chairmanship of the finance minister to propose recommendations for pension reforms. “The recommendations, when finalised, will be shared with the public,” he assured.

In other news, Aurangzeb discussed the recent visit by a Saudi delegation to Pakistan, which he described as a “confidence booster.”

The discussions with the Saudi delegation were positive, reinforcing the country’s commitment to moving in the right direction.

Looking ahead, Aurangzeb announced that the IMF mission would arrive in Pakistan this month for key talks on structural reforms.

These discussions will focus on several crucial areas, including increasing the tax-to-GDP ratio from the current 9 per cent to a more sustainable 13-14 per cent, reforming the energy sector, and privatising State-Owned Enterprises (SOEs).

The finance minister also highlighted the need to reduce non-development expenditure and commended the Sindh government’s Public-Private-Partnership model as a successful strategy that could be replicated at the federal level.