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Cabinet to review decision on pension payment
View(s):By Damith Wickremasekara Â
A Cabinet decision to calculate pensions of retiring public sector employees, based on pending salary increases leading upto 2020, has been put on hold, officials said. The decision to hold back the implementation of the Cabinet paper approved in January this year came after it was revealed that the move would cost the Government billions as some 100,000 public sector employees who will retire during that period will be entitled to the benefit.
The Cabinet paper by the Ministry of Public Administration and Management proposed that a Rs 10,000 salary increase announced last year should be taken into consideration in calculating the pensions of those retiring even before it was fully implemented. The salary increase is being provided in five stages and only two stages have been implemented with three more stages to be implemented until 2020.
The Sunday Times learns that the Cabinet paper had been rushed through without outlining the full implications. The Cabinet Committee on Economic Management is due to review the decision.  Public Administration Ministry Secretary J.J. Ratnasiri told the Sunday Times that the implementation of the proposal had been put on hold due to the non-availability of information on the number who had already retired, who will benefit from the scheme, the number due to retire and the financial implications.
To implement the cabinet decision, the Ministry had already prepared the circular to be dispatched to ministry secretaries, provincial council chief secretaries and heads of departments. The Ministry in its circular has justified the calculation on the grounds that calculation of the pensions would be complicated after public servants gain the full salary increase.
It has also pointed out that in the event of the death of the employee before 2020 he or she will not be entitled to the benefit and therefore the calculation should be done on the basis that the employee received the Rs .10,000 increase.
The Government currently pays pensions for some 1.4 million public sector employees and armed forces personnel with the pension bill amounting to above Rs. 180 billion.