Pension expenditures have become a critical fiscal challenge for the Government of Punjab, surging to Rs. 312 billion in the fiscal year 2022-23. The accrued pension liability now stands at Rs. 6.5 trillion, significantly constraining the government's capacity for current and development expenditures. This study explores the existing regulatory framework for pension liability management and proposes actionable solutions based on global best practices. Through a comprehensive methodology that includes literature reviews, data analysis, comparative studies of national and international practices, and stakeholder interviews, the research highlights alarming trends: a 300% increase in government revenues over the past decade, contrasted with a staggering 650% rise in pension costs. Key contributors to this fiscal burden include the Defined Benefit pension scheme, regularization of temporary employees, and adverse judicial rulings. To address these challenges, the study recommends transitioning to a contributory pension scheme, reducing commutation rates, aligning pensionable pay with basic pay, indexing pension increases, and leveraging biometric verification systems. Additionally, amendments to the Civil Servants Act and better management of the Punjab Pension Fund are proposed to ensure fiscal sustainability. These measures aim to mitigate the growing financial strain, ensuring long-term stability and efficient pension liability management for the Government of Punjab.
| Published in | Journal of Finance and Accounting (Volume 13, Issue 1) |
| DOI | 10.11648/j.jfa.20251301.11 |
| Page(s) | 1-13 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2025. Published by Science Publishing Group |
Compound Annual Growth Rate, Implementation and Coordination, Consumer Price Index, Pension, National Pension System, Financial Year, Government of Pakistan
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APA Style
Ghazi, A., Salamat, U. F. (2025). Effective Management of Provincial Pension Liability. Journal of Finance and Accounting, 13(1), 1-13. https://doi.org/10.11648/j.jfa.20251301.11
ACS Style
Ghazi, A.; Salamat, U. F. Effective Management of Provincial Pension Liability. J. Finance Account. 2025, 13(1), 1-13. doi: 10.11648/j.jfa.20251301.11
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Download@article{10.11648/j.jfa.20251301.11,
author = {Aqsa Ghazi and Umar Farooq Salamat},
title = {Effective Management of Provincial Pension Liability},
journal = {Journal of Finance and Accounting},
volume = {13},
number = {1},
pages = {1-13},
doi = {10.11648/j.jfa.20251301.11},
url = {https://doi.org/10.11648/j.jfa.20251301.11},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20251301.11},
abstract = {Pension expenditures have become a critical fiscal challenge for the Government of Punjab, surging to Rs. 312 billion in the fiscal year 2022-23. The accrued pension liability now stands at Rs. 6.5 trillion, significantly constraining the government's capacity for current and development expenditures. This study explores the existing regulatory framework for pension liability management and proposes actionable solutions based on global best practices. Through a comprehensive methodology that includes literature reviews, data analysis, comparative studies of national and international practices, and stakeholder interviews, the research highlights alarming trends: a 300% increase in government revenues over the past decade, contrasted with a staggering 650% rise in pension costs. Key contributors to this fiscal burden include the Defined Benefit pension scheme, regularization of temporary employees, and adverse judicial rulings. To address these challenges, the study recommends transitioning to a contributory pension scheme, reducing commutation rates, aligning pensionable pay with basic pay, indexing pension increases, and leveraging biometric verification systems. Additionally, amendments to the Civil Servants Act and better management of the Punjab Pension Fund are proposed to ensure fiscal sustainability. These measures aim to mitigate the growing financial strain, ensuring long-term stability and efficient pension liability management for the Government of Punjab.},
year = {2025}
}
TY - JOUR T1 - Effective Management of Provincial Pension Liability AU - Aqsa Ghazi AU - Umar Farooq Salamat Y1 - 2025/01/24 PY - 2025 N1 - https://doi.org/10.11648/j.jfa.20251301.11 DO - 10.11648/j.jfa.20251301.11 T2 - Journal of Finance and Accounting JF - Journal of Finance and Accounting JO - Journal of Finance and Accounting SP - 1 EP - 13 PB - Science Publishing Group SN - 2330-7323 UR - https://doi.org/10.11648/j.jfa.20251301.11 AB - Pension expenditures have become a critical fiscal challenge for the Government of Punjab, surging to Rs. 312 billion in the fiscal year 2022-23. The accrued pension liability now stands at Rs. 6.5 trillion, significantly constraining the government's capacity for current and development expenditures. This study explores the existing regulatory framework for pension liability management and proposes actionable solutions based on global best practices. Through a comprehensive methodology that includes literature reviews, data analysis, comparative studies of national and international practices, and stakeholder interviews, the research highlights alarming trends: a 300% increase in government revenues over the past decade, contrasted with a staggering 650% rise in pension costs. Key contributors to this fiscal burden include the Defined Benefit pension scheme, regularization of temporary employees, and adverse judicial rulings. To address these challenges, the study recommends transitioning to a contributory pension scheme, reducing commutation rates, aligning pensionable pay with basic pay, indexing pension increases, and leveraging biometric verification systems. Additionally, amendments to the Civil Servants Act and better management of the Punjab Pension Fund are proposed to ensure fiscal sustainability. These measures aim to mitigate the growing financial strain, ensuring long-term stability and efficient pension liability management for the Government of Punjab. VL - 13 IS - 1 ER -
Faculty of Managements Sciences, Superior University, Lahore, Pakistan
Police Department, Punjab Police, Lahore, Pakistan
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