Audit Office warns parallel pension schemes creating unsustainable burden on state budget

The Auditor General’s Office has revealed that parallel pension schemes run by certain institutions outside the state’s official retirement pension scheme are creating an unsustainable heavy burden on the state budget. The Audit Office raised this issue while speaking before the People’s Majlis Budget Study Committee regarding the state budget for upcoming years. According to the Audit Office, urgent reforms must be introduced to the pension system to safeguard the state’s fiscal sustainability and control growing pension expenditures. Furthermore, the significant expenditure required for pension schemes is currently the biggest challenge facing the state’s finances. Speaking before the committee, the Audit Office stated, “In addition to the state’s pension law, the existence of parallel pension schemes or double pension schemes within government departments causes the amount of money the state must pay out as pensions to increase significantly year after year.” While 2.61 billion rufiyaa has been allocated for pensions in next year’s budget, pension office calculations indicate that if this system is not reformed, the expenditure will rise to 4 billion by 2042 and reach 7.9 billion rufiyaa by 2055. Additionally, the Audit Office has recommended controlling the number of employees to reduce recurrent government expenditure and increasing productivity. Regarding this matter, Finance Minister Hassan Zareer stated that the Ministry is working with the National Pay Commission to conduct a special audit. He further stated that following the audit, personnel would be reallocated to areas where there is the greatest need for staff, and that in the future, recruitment would be limited strictly to positions that are absolutely necessary.