Fiscally Sustainable Pensions in Pakistan
doi: https://doi.org/10.35536/lje.2023.v28.i2.a5
Mahmood Khalid, Naseem Faraz and Aisha Irum
Abstract
Public sector employment remains attractive for important reasons such as job security and a guaranteed pension. Evaluating alternate pension systems has gained importance among policymakers concerned about the aging population and rising poverty levels. Pakistan has a Pay-As-You-Go type pension system, financed by taxpayers’ money, and has resulted in the building up of unfunded liability for the government. The expenditures on superannuation are gradually coming into mainstream discussions on fiscal sustainability and public finance management. These additional expenditure liabilities require an increase in future taxes to be solvent. We use scenario-based projections to highlight how the existing pension system is fiscally unsustainable and what approaches are needed to make it sustainable.
Keywords
Fiscal policy, public economics, public finance, tax-induced, pensions.
Citation:
“Khalid, M., Faraz, N., and Irum, A. (2024). Fiscally Sustainable Pensions in Pakistan.” Lahore Journal of Economics, 28(2), 99–133.
https://doi.org/10.35536/lje.2023.v28.i2.a5
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