The Federal Minister Mr. Umar Asghar Khan after his this month extensive tour of Saudi Arabia and UAE has once again raised the often repeated slogan of “Overseas Pakistanis Pension Scheme”. This green green garden slogan is repeated by almost all governments for the last 5/6 years.
In 1997 Overseas Pakistanis Foundation (OPF) introduced this scheme by creating a Trust and it was given to understand scheme had been designed with the support of International Labour Organisation claiming also this will set an example for other countries like Philippines, India etc.
The academic meaning of Pension and of course practical practice universally is that Pension is an amount which an Employer may that be a government or a private establishment pays regularly to its employee in his old age at retirement in token of appreciation and recognition of long services rendered for the government or the company. This monthly payment of pension is given from the pocket of Government or concerned Establishment. There is another form of Pension called Gratuity in which Employer deducts a monthly sum from the salary of concerned employee, adds or contributes similar amount from its own account and this double is put into a bank account and at the retirement of employee this all doubled plus profits accrued thereon is handed over to the retiring employee which due to passage of long time had by then become a huge amount. But OPF Pension is perhaps the only pension world over in which nothing is contributed by the government or OPF but an OP worker pays all from his own pocket and at the time of retirement OPF in a manner returns him back his deposited money not fully but after deducting a portion which in other word one can say imposing a penalty “fine for your depositing with us and causing us pain in keeping a record of this money”.
OPF Pension is that one is to pay a fixed amount of his own choice every month minimum for 4 years. For example if an Overseas Pakistani (OP) deposits Rs. 500 a month for minimum 4 years, after 15 years OPF would start paying him a pension of Rs. 1,120/- a month.
But if same OP worker is a little wise and opts say National Savings Mahana Amadni Account and deposits same Rs. 500 a month for 5 years and with re-investment at end of 15 years he would start getting approx. Rs. 2,000 a month.
OPF has till today never clarified what does it mean from 15 years. Is 15 years to be counted from very first month contribution a worker pays or this 15 years will commence from the date of his last payment of minimum 4 year contribution. If this 15 years are to be counted from the date last monthly contribution of minimum 4 years then profit in case of National Savings would be more than Rs. 3500 while in case of OPF same Rs. 1120/-.
National Savings scheme is government 100% guaranteed with no risk involved at all where there is no surety of safety of amount of OPF. Any successive government hungry of cash can in the name of privatization sell OPF (at least a proposal was put up 2 years back). OPF’s performance in any sector is not appreciable. It has only one industrial unit financial position of which is such no private party appears to purchase it. Doubts have been cast in its housing sector even one of its Minister publically accepted doubtful dealing though despite being minister he could not do. A foreign newspaper commenting on Overseas Pakistanis recently in its editorial stated there is said to be some OPF but it do no body appears to know. There appears to be no clause of increase of Pension rate in future in case of OPF where in case of National Savings chance of increase in rate of return are always bright.
s.a.j
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22 oCTOBER 2000