Pakistan has proposed a $500 million (Rs 140 billion) loan from the Asian Development Bank (ADB) to reform its public sector pension system.
The initiative seeks to make the pension framework more financially sustainable, transparent, and efficient amid rising liabilities.
The loan will finance the Transforming Public Sector Pension Program, which aims to alleviate the growing financial pressure on the federal government, whose annual pension bill has reached Rs 1,550 billion.
Finance Ministry officials said the program will implement structural reforms and strengthen institutional capacity to better manage pension liabilities.
Three-phase reform strategy
Phase 1: Develop a sustainable framework for the pension system, improving long-term financial management and reducing future fiscal burdens.
Phase 2: Strengthen the operational structure and monitoring of the Defined Contribution Pension Scheme, ensuring effective implementation and better oversight.
Phase 3: Establish a permanent training and awareness program for government institutions to efficiently manage the reformed pension system.
Officials emphasized that these reforms are part of a broader federal and provincial strategy to control escalating pension costs while improving transparency and accountability.
The program is expected to make the public pension system more stable, efficient, and transparent. By shifting to a defined contribution model, the government aims to reduce long-term liabilities and ensure sustainable management of pension funds.
Finance Ministry officials added that these reforms will strengthen governance, enhance monitoring, and improve financial management across government institutions.
