Government reduces pension on retirement

ARY NEWS

Transcript

00:00I was shocked to hear this.

00:02It's obvious that Sadaf is saying that I'm jealous of them.

00:06Jealous of me?

00:07The people whose pensions are more than Rs. 16 lakhs,

00:10or some figures have come out,

00:13some have more than Rs. 5 lakhs and some more than Rs. 3,000,

00:17have pensions more than Rs. 2 lakhs.

00:18Look at their numbers too.

00:20Anyway, what is this?

00:21How do you decide on pensions?

00:24And so far, the governments have been expressing concern

00:28that these pensioners are a burden.

00:30We have nothing against them because they have served the country.

00:33But what is this procedure?

00:36In the name of God, the most gracious, the most merciful.

00:38I will tell you a story about Ashfaq.

00:40It's about 2012-13.

00:42This discussion was being held at a table of the Ministry of Finance.

00:45At that time, the burden of pensions,

00:48that is, the federal government was paying in terms of pensions,

00:51was about Rs. 250 lakhs.

00:54At that time, I said in a careful way that it will double in 5-6 years

00:58and will continue to increase in the same way.

01:00Today, when the budget has been presented,

01:02it is Rs. 1040 billion.

01:05Rs. 1040 billion.

01:08The overall expenditure of Pakistan,

01:12whether we are doing it in pensions,

01:14in subsidies, in PSDP,

01:17in the running of the civil government,

01:20in subsidies.

01:21Ashfaq, one thing is that it needs to be evaluated overall.

01:25Because the way it is increasing,

01:27and the quality needs to be improved, we are not able to do that.

01:32In pensions, you retire,

01:34your spouse gets a pension if you don't stay alive.

01:37Then your daughter, if she is married, gets a pension.

01:41Then if you take another job in the government,

01:43you still get a pension.

01:45One thing is that it needs to be cleaned up a lot.

01:47This does not happen in the world.

01:49The second thing that needs to be cleaned up,

01:51and I have always said,

01:52is that we have to take the board of pensions every year,

01:56and we have to finish it on the budget.

01:58This means that their board is also running,

02:00who retired 15 years ago.

02:02That means, we call it, pay as you go.

02:05That is, a part of your pension,

02:06which is deposited in a fund,

02:09that is your reward.

02:11You invest in the market,

02:13invest in national savings schemes,

02:15invest in the bank.

02:18So, the burden has to be reduced by the government.

02:21We cannot reduce it immediately,

02:23because new employees will keep coming.

02:25The real thing is that where the country is standing,

02:27today you should ban new employment in the government.

02:31There is so much burden on the government at the moment.

02:33But doctor, there is one thing,

02:35let's not hurt the feelings.

02:37Because the people who are working there,

02:39in the government sector, their going, their preparation,

02:41from childhood, it is said about a government job,

02:43that of course, their life will be understood.

02:45That is why job security is number one.

02:47After retirement,

02:49there is a lot of concern in the private sector.

02:51There is a lot of concern about what to do after retirement.

02:53So, those who are able to get a job in the government sector with hard work,

02:55they have peace and comfort,

02:57that in the future,

02:59there will be ease for them.

03:01So, the governments should think about this.

03:03Not from today, but from the inception,

03:05how this thing will be managed.

03:07I will add to this, when we say welfare state,

03:09then what are we serving the people in welfare?

03:11If you take the example of other countries,

03:13there is also unemployment allowance.

03:15There are a lot of allowances there.

03:17In old age, you get allowance separately.

03:19You get allowance separately.

03:21And when you have served so much,

03:23you have cut taxes from your salary,

03:25then people should get some in return.

03:27So, Sadaf and Ashfaq,

03:29you have asked such deep questions,

03:31that we will have to do the whole program.

03:33But in a summary manner,

03:35see, one thing is that,

03:37the current employees, their pension cannot be disturbed.

03:39Because that is a contract with the state.

03:41Now, the new employees,

03:43they can be given an example.

03:45Let's say, 10% of what their salary is,

03:47can be deposited.

03:49Partly, the government can pay.

03:51Partly, they will pay.

03:53This happens in the world.

03:55And that will go into a fund.

03:57That means, when they get a lump sum,

03:59it will be far greater than the pension.

04:01I will give you an example.

04:03A government employee uses a car all his life.

04:05You think that,

04:07in the end, he does not get that car.

04:09The government gets that car.

04:11And the expenditure of the car is also more.

04:13Then, you know,

04:15the way it is used, it goes up.

04:17You think that,

04:19we will start giving Rs. 50,000 per month

04:21to that person instead of the car.

04:23Let's say, you lease a car.

04:25On a small scale, Suzuki. On a large scale, Corolla.

04:27This is exactly what I did in the government.

04:29We monetized it.

04:31The effort is that,

04:33all these things are built in your salary.

04:35So that, when you can take home,

04:37you can get a large amount of pension in the end.

04:39Or if it is invested somewhere,

04:41and if you have kept it in the bank,

04:43and you have kept Rs. 1 crore,

04:45and if you are getting a 15% interest rate,

04:47for example,

04:49then you will get Rs. 15 lakhs.

04:51But doctor, there is one more thing.

04:53So, this work,

04:55on behalf of the employees

04:57who are going to retire,

04:59can't the government do it on its own?

05:01That, okay, we have invested

05:03this part of your money here.

05:05From where will you get this money?

05:07And in the end,

05:09you can get the principal amount

05:11when you want to get it.

05:13I mean, just a suggestion.

05:15I am not an expert.

05:17It can be done.

05:19There are managed funds all over the world.

05:21They are run by the governments.

05:23They have also reached the private sector in Pakistan.

05:25Then what will we create?

05:27We call it superannuation.

05:29When you retire,

05:31funds will be created in their name.

05:33Let's say, Sadaf wants to take a risk.

05:35She says, no, I will do it in the stock market.

05:37I want to earn more.

05:39You say, no, I will do it in national savings.

05:41I want to earn only 10-12%.

05:43So, you will use it on your credit.

05:45Since I have worked in Australia,

05:47and Australia's superannuation,

05:49i.e. retirement system,

05:51is one of the best in the world.

05:53There are many such funds.

05:55Like there is a balanced option, a growth option,

05:57a safe option.

05:59So, then your credit is that your money is at your disposal.

06:01For example,

06:03if your life is 30 years,

06:05then you can take more risks.

06:07If your retirement is 15 years,

06:09then you will work.

06:11Those who have 5 years,

06:13they want their money to be balanced.

06:15So, this is what you would call

06:17the actuaries who work in the world.

06:19They have to sit down

06:21and give an order

06:23so that both the pensioner and the giver

06:25can get better.

06:27Doctor, please explain this formula

06:29in which it is being told that

06:3170% of the pension

06:33taken 2 years ago will be given.

06:35This is better.

06:37In the sense that we keep doing this reform.

06:39This is for those

06:41who are in the system at the moment.

06:43How to tie up their pension.

06:45So, that will make them

06:47better off.

06:49I don't think it will make them worse off.

06:51That's fine.

06:53But the real reform is

06:55how the government

06:57has to take the burden

06:59of the pension.

07:01It has to be taken from the books

07:03and taken to the private sector investments.

07:05Let's see how much money

07:07will be there

07:09so that the private sector will get better.

07:11New funds will come to the market.

07:13The government has taken all the burden.

07:15If it keeps increasing like this,

07:17then the pension will increase.

07:19The government has beautifully

07:21transferred the burden to the public

07:23in the form of taxes.

07:25When you reach the retirement age,

07:27your promotion and salary

07:29increases.

07:31If you get a pension

07:332 years ago,

07:35what will you get?

07:37Thank you Dr. Khakhan Najeeb.

07:39Your suggestions are very good.

07:41But you are right.

07:43There needs to be a program

07:45so that the understanding

07:47can be better.

07:49We are not here to hurt someone's feelings.

07:51We are not taking a decision.

07:53The important thing is that

07:55the government should work

07:57for the welfare of the people

07:59and should think about

08:01how these funds can be managed.

08:03There are a thousand ways.

Category

Transcript

Recommended