ISLAMABAD:

The government has introduced a new pension scheme to cut expenses and bring fiscal discipline. In the first phase, it has been implemented for civil employees only and will be extended to armed forces employees after one year.

However, experts warn that this piecemeal approach may not work, as the reform's success depends on the inclusion of armed forces employees, who account for about 70% of total pension allocations.

The government has been struggling to bring fiscal discipline under the International Monetary Fund (IMF) programme. It has taken various initiatives, such as reducing subsidies, winding up departments, and privatising state-owned entities (SOEs). The objective is to cut expenditures amid the piling up of national debt and introduce a model of sustainability.

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