Fiscally Sustainable Pensions in Pakistan

Public sector employment remains an attraction for important reasons: job security and a guaranteed pension (Dixit, 2002). Most of the countries around the world have pension systems, intended to provide income support to those persons who have lost earnings either due to old age or disability due to some incident. Each pension scheme must result into adequate resource provision to meet the basic living standards and ensure that the gap between pre and post retirement earnings is minimum. This would help pensioners live a decent life. As ability to earn significantly reduces in post superannuation age. However, the responsibility for either forced savings or contribution by employers (including civil governments) depends on the type of pension scheme. Some argue that it’s either the sole responsibility of the individual through voluntary savings, the family through family support or the State which can create institutions as per need and sustainability of resources. However due to changing demographics in terms of an ageing population, weaker family support, increased health services and higher expected lives have created a need for policy response to be dynamic.