The World Bank will provide a loan of $75 million for Pensions Reform Project.
According to the concept paper of the project, the civil pension expenditure has been risen exponentially during the last three decades which poses a challenge to the government that needed to be addressed.
Other governments facing similar situations have established various pension systems like the Defined Contribution Scheme (DCS), enabling the investments of pension contributions in funds operated under state laws and regulations to cater to the future needs.
To analyze the prevailing situation in Pakistan, the World Bank had extended technical assistance and submitted in December 2019 an option of Defined Contribution Scheme.
The report and in-house deliberations provide a starting point. To proceed into the matter the Finance Division will formulate a comprehensive pension plan and complete all necessary steps from inception to launch and operations of pension scheme after completion of the project. According to comments of technical section of the Planning Commission the project has been designed on the basis of World Bank's report 2019.
The main objective of the proposed project is to prepare a comprehensive pension plan. The activities (i.e. Rs50 million for equipment and Rs20 million for local/ foreign training/experts) proposed under the project do not support the project objectives. The sponsors may align the project activities with its objectives.