Plan to jack up govt officials' salaries by 5-15% under consideration

• PM Shehbaz Sharif grants another extension to Pay and Pension Commission for submission of recommendations.
• Official sources say PTI-led govt granted a disparity reduction allowance of 15% for grade 1-19 officials.
• Three options for raising salaries include 5%, 10% and 15% hike.

ISLAMABAD: Three options to jack up salaries from 5-15% in the budget for the incoming fiscal year are under the government's consideration, amid the Pay and Pension Commission's failure in submission of a report ahead of the next budget which resulted into the prime minister's decision to grant another extension, The News reported Monday.

The Finance Division issued a notification to announce the grant of another extension to the Pay and Pension Commission, according to which the timelines for the submission of the Commission's recommendation have been extended till June 30, 2022.

Top official sources said that the former PTI-led government had granted a disparity reduction allowance of 15% for the officials posted from grade 1 to 19, with effect from March 1, 2022. However, the new PM Shehbaz Sharif-led government announced another 10% raise in the pension and increased the minimum pay to 25,000 per month.

With this background, the Finance Ministry official said that the government was working on three different options for jacking up salaries up to 5%, 10%, and 15%. The salaries of grade 1 to 19 might be increased as another 5-10% adhoc allowance in the upcoming budget. The salaries of grade 20 to 22 employees might be increased 10-15%.

Besides, the government may increase pensions by 5-10% in the wake of rising inflationary pressures. The Ministry of Finance’s Regulation Wing has completed its internal work and decided to hire an actuary to do the spadework. It was also decided to constitute a Pay and Pension Commission to get its recommendations as well.

The commission was constituted by the PTI led government in April 2020 and former Secretary Finance Abdul Wajid Rana was made its chairman. However, he had resigned and then former bureaucrat Nargis Sethi was appointed as Chairperson Pay and Pension Commission. Later, she also resigned.

Then, the government appointed Zafar Ahmed Khan as Chairman of the Pay and Pension Commission. The commission had sought two extensions so far but failed to come up with its recommendations.

The terms of reference of Pay and Pension Commission included the text box, which is to study the adequacy of existing basic pay scale system and to evaluate the current salaries of government employees throughout the Federation — including the provincial government — and to recommend measures for its improvement and uniformity.

It also includes to make recommendations for the streamlining of existing classification from BPS 1-22, study the separation of existing basic pay scales for specialised departments/occupations/cadres, review of special scales such as management grades, management position scales (MP Scales), special professional pay scales (SPPS); project pay scales, and propose measures for uniformity and improvement, review of admissible regular allowances, special incentives and all other allowances with a view to highlight prevalent distortions and recommend corrective measures, review of existing perks and facilities and make recommendations, including possibility of their monetisation.

On pension, the commission was assigned to highlight existing distortions and anomalies in the Pension Scheme and recommend remedial measures. It was also tasked to verify the sustainability of the current model after critically evaluating future liabilities through an actuarial study, evaluating alternate systems of pension like defined contribution and setting up of pension funds in light of international best practices and recommending a system with clear timelines that is more efficient and sustainable as per the available resources.

It was given the mandate to review the existing incentive regime (honorarium and special rewards) and recommend improvement in it, to evaluate and recommend legislative measures to protect and streamline the Pay, Pension, and Allowances regime for government employees, the commission may, if so desired by the government, make interim recommendations to provide interim relief, pending the submission of its final report. The commission shall have power to co-opt any person or agency to assist it in its deliberations.