The government was considering raising the retirement age to control the pension burden, three federal ministers said on Tuesday and clarified that if approved, the decision would be applicable across the board.

“Age is now just a number. 60 is the new 40,” Finance Minister Muhammad Aurangzeb said at a press conference, flanked by Law Minister Azam Nazeer Tarar and Information Minister Attaullah Tarar, in Islamabad.

The statement comes as the government plans structural reforms ahead of a new bailout package from the International Monetary Fund package.

Aurangzeb, a former banker, described the pension as a “big liability” and added that the government has to ascertain how to lead it forward.

“The institution I left before coming here, we took this first step that we raised the retirement age from 60 to 65 because those are your productive years and you can use its result by extending the term,” he said.

He stressed the need for changing the service structure over a period of time to overcome the pension burden.

The finance minister claimed that the recent improvements in the economy were bringing stability to the country and building confidence. Aurangzeb said that he was in touch with some investors in the United States and Europe but did not share details.

He confirmed that the country was seeking a long and large fund programme with the IMF, but highlighted that the structural reforms were important.

He went on to add that the government has to cut its expenses by following the public-private partnership to build the infrastructure.

‘Across the board’ reforms

While talking about the pension reforms, Law Minister Tarar said that it would be across the board and the government does not have the “clarity” on the age.

He added that the government wanted to have a “breathing space” in the financial situation and admitted that the public sector was a big pool where a large amount of money is gone for salaries, retirement benefits, and pensions.

“It will be across the board. Legislation is required for this as civil servants, armed forces, judicial organs, and executive organs are included,” he said and added that the prime minister has formed a committee under finance minister leadership to overlook the matter.

Pension burden

Information Minister Attaullah Tarar also used the term “pension burden” and added that it was a “hurdle” in curtailing the expenses.

“This is a burden which the Government of Pakistan has to incur,” he said and clarified that there was a suggestion to implement it in all institutions.

“It will be across the board whenever it will be approved,” Tarar said and added that recommendations were sought on this.