The GSPGS was initiated in 1954 and it has since been periodically amended. The objectives of the scheme are to attract workers to service by offering a reasonable compensation package after retirement and assure that on retirement they will not experience any drastic re- duction in their monthly income. Entitlements begin on retirement, at the age of 60, or earlier after 25 years of pensionable service.
Gratuity is extended to those employees who have served five years or more, but less than 10 years, or
whose job was abolished before the completion of the 25 years minimum eligibility period. Such employees receive one month’s pay for every year served, or 1.5 month’s pay in the event of death or disability. The maximum amount of gratuity is Rs175,000. Pension is equal to 70% of the last pay drawn.
The minimum pension is currently fixed at Rs3,000. Officers in BPS-20 and above are now entitled to special additional pension on retirement equal to the admissi- ble pre-retirement orderly allowance. This includes the provision that whenever the government revises the rates of the orderly allowance, the same increase shall be made applicable to the special additional pension of the retired officers.
In case of in-service death, the widow/eligible family members get 50% of gross pension and gratuity equal to 25% of gross pension.1 In the event of death after re- tirement, the widow/members of family get 50% of the pension drawn by the deceased. In case of death/dis- ability in course of government duty, the family or the employee is allowed additional pension and gratuity, at various rates depending on the extent of disability. Retired government servants are also entitled to medi-
cal treatment at government expense on a par with the facility available to the serving government servants. They are also allowed the facility of reimbursement of medical charges.
3.1.1.1 Analysis
a) Targeting efficiency: Mismanagement of
funds coupled with political pressures has been known to result in benefits accruing to those who are not strictly entitled. Fraud and lack of transparency are especially a problem in the semi-autonomous agencies. A substan- tial liability is estimated with ghost pension- ers in the railways and education departments who are drawing benefits with the connivance of the staff.2 While leakages exist, the scheme does appear to provide coverage to all who are eligible for it. Medium.
b) Extent of programme coverage: Coverage ex-
tends to all permanently employed government servants of the federal government, including those in the armed forces, semi-autonomous organisations and most statutory bodies. The people employed in government services on contract are not entitled to any benefits. The number of pension beneficiaries is not avail- able at a central location because a census of pensioners has not been conducted in a while. Estimates indicate that about 1.5 million work- ers are employed at the federal level and cov-
ered under government pension schemes.3
High.
c) Degree of ease of access: Pensions are rela-
tively easy to access with the recipient being able to withdraw the monthly amount at the NBP. Establishing eligibility for gratuity and family pension is a more cumbersome pro- cess, though once the death of a pensioner has been verified payment to eligible dependents is generally smooth. In the event of disability of a pensioner, the extent of the disability has to first be verified and attested by a medical board before the pension rate can be determined and the process can take months. Medium.
d) Percentage of programme expenditure dedi- cated to benefits: Administrative costs are
minimal with the NBP acting as the imple- menting arm of the pension scheme. High.
e) Adequacy of support: Pensions are fixed ac-
cording to the length of service and because of
the non-indexation of pensions, inflation ends up eroding the real value over time. An in- crease in pension by the government is some- times undertaken to make up for the increase in the cost of living, but it is done on an ad hoc basis. The practice of waiting for a few years and then announcing an increase also works against the pensioners because the value of the pension has deteriorated over time. Ad hoc increases have resulted in inequity among old and new pensioners. The disparity has also in- creased because of the periodical revision of pay scales. To make up the gap between the rate of pension admissible to the old and new pensioners, increases were given in the past that were based on perception rather than on analysis. Disparity in both gross and net pen- sion has thus continued to rise. In addition, certain allowances are not counted towards the calculation of pension. These include house rent allowance, utilities, etc. It is estimated that a target benefit of 70% of pensionable pay comes to about 45% of take home pay.4 Low.
f) Grievance redressal: Pensioners are expected
to approach the office of the Accountant Gen- eral Pakistan Revenues for any issue with pen- sions. This is generally a cumbersome process requiring the petitioner to produce a host of documents and affidavits. Low.
g) Extent of self/progressive financing and sus- tainability: Pension is funded through alloca-
tions from the budget. The federal budget ear- marked an amount of Rs129.1 billion, or 5.3% of current expenditure, for pensions (both mil- itary and civil) in 2012-13; however, in revised estimates, the same was increased to Rs167.4 billion.5 The Federal Budget 2013-14 has ear- marked an amount of Rs171.3 billion, once again 5.3% of current expenditure, for pen- sions.6 There is thus a serious financial liabil-
ity problem. There are no contributions to the scheme and it is maintained on an unfunded basis. The expenditure is exclusively financed by the Government of Pakistan through annual budget allocations. Low.
h) Exit mechanisms: Family pension is admissi-
ble for life/remarriage of the widow/marriage of daughter/marriage of dependent sisters/21- year sons. Dependent disabled children get family pension without any age limit. High.
i) Degree of impact on the MDGs: To the extent
that pensions represent a form of income sup- port for those who have retired from active support, they can go some way towards at- tainment of MDG 1, particularly when pension payments to low-income employees are taken into account. Links with other MDGs are tenu- ous, though pensions may be used to access ba- sic health and education services.
j) Programme potential to be extended to the RAHA target group: Given that the pension
is specifically meant for federal government employees, there is no potential to extend the scheme to any particular area.
3.1.2 Public Sector Benevolent Fund and Group