Islamabad ‘:
The Asian Development Bank (ADB) has said that the pension plan of Pakistan government employees is “attractive”, but imposes an immense burden on the National Treasury because it lacks a financing mechanism.
In a report published on Friday, the institution based in Manila also requested radical reforms in the country’s underdeveloped insurance sector to reinforce financial protection against natural disasters and support the growth of the private sector.
The ADB detailed how the generous benefits offered to retired government employees are not supported by a structured financing plan, which makes the system a significant drainage for public finances.
The report pointed out that “the burden of government pension in treasure is very high.”
The report required expanding the scope of the employee’s background benefits institution to create a more sustainable and taxpayer system, and emphasized the critical role that a robust insurance sector could play in Pakistan’s economic stability.
The report suggested that the government should promote the insurance sector, particularly for social security programs aimed at the poor.
He also emphasized the need to improve the regulatory environment for insurance companies.
