by Karim Muhammad Khan
The much-debated pension reform was introduced as part of the conditions agreed upon under the International Monetary Fund’s (IMF) 37-month-long Extended Fund Facility (EFF) loan program of $7 billion approved for Pakistan.
The reform is aimed at fulfilling structural adjustment requirements and regulating government expenditure to reduce the fiscal burden on the national treasury. Under the revised scheme, pension calculations will be based on the average salary earned during the last two years of service, which is expected to result in a reduced pension amount for retirees.
Discontinuing double and triple emolument facilities drawn by affluent and powerful pensioners within the country and abroad is a positive step toward equitable reform. However, deducting amounts from the sole source of income for ordinary pensioners is unjust and violates their fundamental rights. These individuals dedicated decades—often the prime years of their lives—to serving the state as the backbone of its machinery.
Pensions serve as essential old-age security, especially since physical and mental capacities often decline after sixty years, making it difficult, if not impossible, to secure or continue employment at that stage of life.
Countries renowned as welfare states, such as Norway, Switzerland, Sweden, Japan, and the Netherlands, provide exceptional welfare services and pension funds that enable their senior citizens to lead dignified lives after retirement. These nations have comprehensive social welfare systems offering a range of amenities alongside generous monthly pensions. Examples include subsidized housing schemes, universal healthcare services, social insurance, adult care centers, and recreational facilities for the elderly.
In contrast, while Pakistan has enacted legislation to protect the rights of senior citizens—such as establishing senior citizens’ councils and facilities like Darul Shafaqat (old-age homes)—these measures fall short of addressing the diverse needs of ageing pensioners. The existing support is inadequate to meet the emerging health challenges and other necessities of the elderly population, highlighting a significant gap in the social welfare system.
Pensioners residing in hard-to-reach regions like Gilgit-Baltistan require greater attention and support from the state, rather than a reduction in old-age security benefits under the guise of pension reform. The remote valleys of this region pose significant survival challenges due to their rugged geographical terrain, where aging pensioners are often responsible for supporting not only themselves but also their entire families.
The winter season exacerbates these difficulties, with temperatures dropping below -10 degrees Celsius, leading to a sharp rise in expenses. These include the cost of warm clothing for families, home heating appliances or firewood, nutritious food, livestock fodder, healthcare for cold-related illnesses, and other essential needs. Adding to their woes are frequent power outages, which further complicate their daily lives.
To meet these extra expenses, many pensioners are forced to take loans from financial institutions. The harsh conditions, including ankle-deep snow, freezing temperatures, and hazardous mobility across the valleys, make life even more challenging for the permanent residents of this region. This underscores the urgent need for targeted financial and social support to ensure these pensioners can live with dignity despite the extreme conditions.
Instead of curbing the old-age security benefits of pensioners, attention should be directed toward ensuring good governance, eradicating rampant corruption, curbing extravagant lifestyles, and minimizing excessive government protocols to alleviate the fiscal burden on the national exchequer. Federal Minister for Planning, Development, and Special Initiatives, Mr. Ahsan Iqbal, recently remarked that access to IMF funding could be avoided if corruption in the country were reduced by 50%, thereby improving the fiscal deficit.
Furthermore, Dr Ishrat Hussain, in his seminal book “Governing the Ungovernable,” emphasised key reforms, including broadening the tax net, increasing productivity in agriculture and industry, investing in human capital, and diversifying the production of value-added export goods and services. He also underscored the need to attract foreign investment and ensure efficient, transparent use of public resources through stringent rules, fair audits, and accountability mechanisms.
In alignment with these recommendations, the 1973 Constitution of Pakistan explicitly emphasises the social security of its citizens. It is, therefore, a constitutional obligation of the state to safeguard the welfare and rights of its ageing pensioners by providing essential amenities and protecting their social security benefits. Curbing these fundamental rights through pension reforms not only violates constitutional principles but also undermines the dignity and well-being of the nation’s senior citizens.
Karim Muhammad Khan is a teacher trainer educator working as Principal of Government Boys High School Nomal Gilgit. He can be reached at: karimmohdkhan1973@gmail.com