Islamabad: (RightNow) The government plans to secure a $500 million loan for pension reforms. This loan, equivalent to 138.48 billion rupees, will be obtained from the Asian Development Bank.

Sources reveal the initiative is named the Transforming Public Sector Pension Program. The ADB will provide this loan for 3 years, along with technical assistance worth 15.92 million rupees.

According to the Ministry of Finance, the current pension system is a significant financial burden on the national treasury. Annually, the budget must cover pension bills for retired government employees, and this burden is increasing.

The government introduced a contribution pension scheme for new hires starting in 2024. Reforms in the old defined benefit scheme are also underway to reduce financial strain.

It is noteworthy that Pakistan has previously borrowed from the ADB and World Bank for pension reforms. Institutional reforms require administrative and financial measures this time as well.