CHITRAL: The recent budget shows that a huge amount of Rs 421 billion has been allocated for payment of pensions to government employees for the year. This amount keeps snowballing every year.
The private sector pays a lump some amount to a retiring employee at the time of retirement. This is a one time payment. It is called a ‘golden handshake’. The person uses this money to do business or puts it in a savings account with the National Savings or a bank and gets monthly income. The employer institution is absolved of any responsibility with regard to the person thereafter.
With Pakistan government, the procedure followed is of the British colonial era where a retired government servant has to look at the government every month to pay him/her pension. Then, it was done to keep the retired people obliged to the government for life long. This procedure still practiced shoddily, besides being very expensive for the government in maintaining huge organisations dealing with monthly pensions, is also a hotbed for corruption where ghost pensioners suck billions from the exchequer every month.
It is only sensible for the government to learn the procedure followed by the private sector and save billions for the national exchequer. The initial huge lump sum for the purpose can be borrowed from the IMF or World bank etc, but will soon pay for itself by colossal saving for the government. .. CN report, 15 June 2020