THE federal pension bill has crossed Rs1 trillion annually, making pensions one of Pakistan’s largest recurring expenditures. Furthermore, the recent budget has projected a deficit of approximately Rs7 trillion, which will be financed through borrowing. Pakistan’s tax net encompasses only a limited number of sectors, thereby placing an increasing burden on the economy each year.

Pensions are generally regarded as a legitimate right of citizens, but immediate reforms are necessary to reduce the growing fiscal burden on the national economy. Pension benefits are not only extended to retired employees, but in many cases continue to be provided to their heirs after the employees’ death.

The government should consider implementing a pension policy that primarily supports retirees during their lifetime, while gradually revisiting the continuation of family pensions. Urgent policy intervention is required, or, else, the snowball effect of rising pension liabilities may further burden taxpayers and deepen the strain on the already narrow tax base.

Asadullah Siddiqui
Lahore

Published in Dawn, August 2nd, 2026