December 1, 2021

Sindh cabinet approves pension reforms scheme to save Rs894 bn

Murad Ali Shah presiding over meeting

Sindh cabinet approves pension reforms scheme

KARACHI (June 4, 2021): Sindh cabinet has approved a Pension Reforms Scheme under which around Rs894.4 billion would be saved, otherwise the pension bill of the government would surpass the salary bill within next 10 years.

The meeting was held under the chairmanship of Sindh Chief Minister Syed Murad Ali Shah at CM House on Friday.

The chief minister being in-charge minister of the finance department told the cabinet that in 2012 the number of government employees were 477,570 and their monthly salary and pension bill was Rs11.78 billion and RS6.523 billion respectively. He added that in 2020 the number of employees increased to 493,182 and the monthly salary bill increased to RS23.97 billion while the pension bill rose to RS13.329 billion.

“If the same post-retirement liabilities, including pension, commuted value of pension, gratuity, family pension and others are continued unabated the pension bill will exceed the salary bill within next 10 years,” he said and added therefore a study has been conducted so that necessary reforms could be introduced to control the ballooning pension bill.

Murad Ali Shah said that a restriction on early retirement (minimum 25 years of service and 55 years of age) with reduced pension, according to the number of years in service, was being proposed.

The financial impact is determined based on the assumption that the early retirement reduction factor would be 2.5 percent for each year remaining to reach 60 years of age, he said and added that the accrued pension liability would be declared by Rs433.326 billion.

The CM talking about another reform proposal said that it would be the use of average pay of the last three years of service as the basis to calculate the amount of pension instead of the last drawn salary.

“Setting pensionable salary to average salary of last three years has a reasonable financial impact on the accrued pension liability of active employees,” he said and further elaborated that the accrued pension liability would decrease by Rs348.827 billion.

Talking about `Family pension’ the chief minister proposed to limit it to immediate family members. “The family pension may be limited to wife or wives/husband/son (below 21 years)/daughter till marriage,” he said and added reduction in both the present value (PV) Defined Benefit Obligation (DBO) and the future rate of contribution required to finance future accrual of pension benefits on approximate basis.

He said the accrued pension liability would decrease by Rs112.179 billion. The cabinet approved the Pension Reform proposal and appreciated the efforts of the chief minister to introduce reforms.

Karachi Institute of Cardiovascular Diseases

Minister Health Dr Azra Fazal Pechuho presented a proposal to hand over Karachi Institute of Cardiovascular Disease (KICVD) to Sindh Institute of Cardiovascular Diseases (SICVD) so that it could be made a world class institute like NICVD and its satellites.

Secretary Health Kazim Jatoi giving details said that it used to conduct 9000 Echo tests, 2500 Thallium tests and 1100 ETT tests per year and its OPD has been recorded at 1000 per day. The cabinet was told that the salary component of the KICVD was of Rs646.752 million and non-salary component Rs66.6 million. It showed that the annual budget of the KICVD was Rs713.252 million.

The cabinet approved handing over of KICVD to SICVD along with its staff.

The chief minister directed the health department to allocate budgetary allocations for next financial year and further modernize the institute. Cold Chain vehicles: Minister Health Dr Azra Fazal Pechuho told the cabinet that the EPI has requested for provision of 28 Cold Chain Vehicles, including 20 Cold Chain and eight ultra-freezing vaccine carriers for RS348.853 million for supply of COVID-19 vaccines across Sindh.

The cabinet, keeping in view the urgent need of cold chain vehicles, approved the proposal.

Sindh Institute of Advanced Endoscopy and Gastroenterology

SIAE&G: The provincial cabinet was told that there was a dire need of establishing Sindh Institute of Advanced Endoscopy and Gastroenterology (SIAE&G) Karachi at Dr Ruth KM Pfau Civil Hospital Karachi for treatment of poor patients.

The Health Minister said that currently an endoscopy unit was operating at Surgical Ward-4 of the hospital which was not enough.

The cabinet approved the proposal and directed Minister Parliamentary Affairs Mukesh Chawla to get it passed at the earliest.

MOU

The cabinet allowed the health department to Memorandum of Understanding (MOU) between Benazir Income Support and Health Department to prevent stunting in children under two years of age among the most vulnerable beneficiaries.

Sindh Seed Corporation (SSC)

Agriculture Minister Ismail Rahu briefing the cabinet that the SSC may be given a one-time grant-in-aid of Rs158.612 million for clearing liabilities of its serving and retired employees. The cabinet observed that the SSC was a self-revenue generating entity. Therefore, it should develop its business plan to make itself a sustainable and efficient organization.

Secretary Agriculture Rahim Soomro told the cabinet that the SSC has 6349 acres of land, of which 4801 acres were cultivable. He added that due shortage of funds, manpower and irrigation water the SSC was not in a position to utilize its entire land.

The chief minister directed the Agriculture department to prepare a plan to operate SSC on Public Private Partnership mode. The SSC has vast lands and huge resources, but it has failed to utilize them.

“The private partners would not only make the organization self-sufficient but produce the best seeds to boost our agriculture sector,” he said and added that this may take some time, meanwhile a MD for SSC should be hired from the market. The cabinet approved both the proposals.

The cabinet also formed a committee under Minister Agriculture Ismail Rahu, Minister Revenue Makhdoom Mahboob Zaman and Minister Culture Syed Sardar Shah and secretary Finance and Secretary Agriculture to prepare a bailout plan for SSC and conduct an inquiry into the failure of SSC to generate funds and fix responsibility.

Amendment in LG laws

The provincial cabinet, on the request of the provincial Commissioner, Sindh has approved amendment in sub rule (3) of Rules-24 of Sindh Local Councils (Elections) Rules, 2015.

The amendment reads as “(3) The ballot paper shall be printed in the format of Form-35 as provided in Rule 59 of the Election Rules, 2017.

Sindh Revenue Board

Sindh Chief Minister Syed Murad Ali Shah told the cabinet that Sindh Revenue Board, for 11 months (July to May 2020-21), has collected Rs108.686 billion against Rs91.198 billion during the same period of 2019-20 which showed an increase of 19 percent. He said that during the month of May 2021, the SRB collected Rs10.261 billion as compared to Rs6.734 billion collected during May 2020 which showed a growth of 52 percent.

The cabinet appreciated the performance of the SRB.

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