Sustainable Energy and Economic Development (SEED) Terms of Reference
TOR Name: National Expert on Pension Reforms
Work plan Component #: 1
Informs Log-frame Indicator:3.1
Duration: 10 weeks across November 2021 – February 2021
Location: Peshawar based (for National Expert)
Programme Background
Sustainable Energy and Economic Development (SEED) is a £37.5 million programme that aims to support provincial economic development and sustainable energy in Pakistan. It will support the province of Khyber Pakhtunkhwa (KPK), to plan and finance the infrastructure and investment it needs for growth, jobs and prosperity. The programme will also address Pakistan’s energy crisis by providing innovative financial solutions to industry for the adoption of sustainable energy practices. Within SEED, ASI has been contracted to deliver the first component - Improved Economic and Urban Planning in Khyber Pakhtunkhwa (KP) – with a budget of £15 million. The outcome of the programme will be public and private investments generate greater economic, social, and environmental returns. The programme will be managed by the UK’s Foreign Commonwealth and Development Office (FCDO).
Context
Since inception, SEED has been providing technical and advocacy support to the GoKP for pension reforms. The first wave of these reforms was announced with the provincial budget in July, this year. These include the introduction of a minimum age limit for early retirement, rationalization of beneficiaries eligible for receiving family pension as well as exclusion of dual pensioners and active government employees drawing family pensions. In addition, the GoKP announced that all employees joining the civil service after the 1st of July 2021 would subscribe to a Defined Contribution Scheme (DCS) of pension, as opposed to the prevailing Defined Benefits Scheme (DBS) which would continue for existing employees.
This was a result of a detailed briefing provided to the Cabinet Committee on Pension Reform, held on the 27th of April, 2021 where SEED recommended a transition to the DCS. SEED was subsequently requested by the GoKP (during Project Steering Committee meeting held on the 6th of July and follow-up meeting with the Finance Department held on 27th of July, 2021) to technically support the design and rollout of the DCS reform. In this regard, SEED intends to hire a National Expert who will be supported by an International Expert to prepare a strategy and roadmap for the reform initiative.
Objective
To develop a comprehensive, technically sound strategy and roadmap for introducing a contributory pension scheme for civil servants pensions in KP, in close collaboration with the GoKP.
Expected Deliverables
D1: Inception Report
The Inception Report will describe the key objectives of future pension policy of KP Government; outline of the Strategy to meet those objectives; and indicate the sources from which necessary data and information will be obtained.
D2: Draft DCS Reform Strategy
The Strategy will include
· Objectives, and underlying rationales, of the KP Government’s pension policy for future employees;
· Review of the important aspects and features of the regulations and design of the two important types of Defined-Contribution Pension Schemes currently followed in Pakistan. These include:
o Provident Fund Schemes
o Voluntary Pension System
Pros and cons of Provident Funds and Voluntary Pension System
· Review of institutional architecture for implementation of Provident Funds and Voluntary Pension Scheme, including:
o Setting up of pension accounts
o Payment of contributions
o Investment of assets of the scheme
o Accounting and record keeping;
o Auditing and disclosures;
o IT and data management;
o Options on retirement/leaving serviceOversight and regulation
o Grievance redress.
o Key features of the proposed pension scheme
o Proposed design features including the contribution rates by employer and employees, commutation/early withdrawals etc
o Pros and cons of in-house investment management versus outsourcing
o Tax treatment of contributions, earnings and withdrawals;
o Investment options and expected rates of return; and
· The decision whether to introduce a new pension law or amend the existing pension law to implement the new pension scheme for future employees shall be made by KP Government. The consultant shall review the relevant clauses of Laws and Rules, identified by Finance Department and Law Department of KP, and drafting of amendments needed to implement the new pension scheme for future employees ;
· Proposal regarding the size and qualification for a dedicated team to assist KP Government in managing the transition and setting up the institutions and infrastructure needed to implement the new pension scheme.
· Broad road map / Implementation Plan including key milestones and timelines regarding the transition.
· Incorporate the ‘Do No Harm assessment’ of the DCS Strategy which will be supported by Social Inclusion Advisor of SEED.
D3: Presentation and finalization of the DCS Strategy
Presentation of the draft Strategy to the GoKP i.e. Finance Department, Planning & Development Department and/or FCDO, and finalization of the document in line with feedback provided.
Tasks
The National Expert will:
· Conduct consultative meetings with civil service pension stakeholders including relevant officials from the Finance Department, Accountant General-KP, KP Fund Management (unit within Finance Department), as well as relevant experts from SEED and other donor-funded programs working in this space;
· Review relevant provisions of laws and rules, identified by Finance and Law Departments of KP Government, pertaining to the existing pension scheme of KP Government which may need to be amended or superseded through a new pension law;
· Develop the strategy and participate in regular check-ins with the SEED team to share progress, discuss problems and make revisions/adjustments as appropriate;
· Coordinate closely with the International Pension Expert to plan and conduct work around joint deliverables, participate in meetings with key stakeholders, as well as solicit and incorporate relevant technical input in the development of the DCS Reform Strategy
· Present the strategy to the Finance Department (and other GoKP counterparts) as well as FCDO (if required) and make revisions in line with feedback provided.
· Carrying out a Do No Harm assessment of the DCS Strategy designed for KP.
The International Expert will:
· Participate in milestone meetings/presentations with senior counterparts from GoKP , in coordination with the National Expert and the SEED team;
· Review relevant documents to gain an in-depth understanding of the policy context and institutional structure for civil service pension in KP;
· Support in developing the DCS Reform Strategy by:
o providing specific technical content on international ‘best practice’ for contributory pension models including any lessons learned for designing and rolling out contributory pension reforms in comparative economies at the national and subnational levels;
o reviewing and providing input on all technical/analytical work carried out to support the Strategy as well as all Deliverables developed under the assignment;
· Participate in regular check-ins with the SEED team to share observations, identify risks and making revisions/adjustments as appropriate;
· Coordinate closely with the National Pension Expert to plan and conduct work around joint deliverables, participate in meetings with key stakeholders.
· Present the strategy to the Finance Department (and other GoKP counterparts) as well as FCDO (if required) and make revisions in line with feedback provided.
· Integrate the aspects of ‘Do No Harm assessment’ of the DCS Strategy in consultation with SEED’s Social Inclusion Advisor.
Delivery Schedule
Deliverables
Expected delivery date
D1
D1.1
An Inception Report
9th Dec, 2021
D2
D2.1
Draft DCS Reform Strategy: Preliminary Presentation to the Finance Department
22th Dec, 2021
D2.2
Draft DCS Reform Strategy
10th Jan, 2022
D3
D3.1
Presentation on the draft Reform Strategy
18th Jan, 2022
D3.2
Final DCS Reform Strategy
7th Feb, 2022
Reporting
Both National and International Experts on Pension Reforms shall report to the Deputy Team Leader, SEED in close coordination with the Team leader. Feedback and input from the GoKP, FCDO, and/or SEED will be provided at frequent and regular intervals.
Experience & Skills of the National Expert on Pension Reforms
· Minimum educational/professional qualification:
o Post-graduate degree in Finance or Business Administration (with major in Finance); or
o CFA charter holder; or
o ASA (Associate of Society of Actuaries of USA and Canada) or equivalent.
· At least 10 years of relevant experience including investment management of pension fund assets, governance of pension schemes, or pension policy. Experience of pension reform efforts in the federal or any of the provincial governments will be preferred.
· In-depth understanding of policies governing civil service pension at the national and provincial levels;
· Sound knowledge of voluntary pension schemes, private savings/investment/insurance instruments and their broader significance in the context of capital markets. Past experience on fund management in senior positions will be preferred.
· Demonstrable ability to internalize and process complex data into policy actionables. Past experience of directly advising senior executive decision makers will be preferred.
Experience & Skills of the International Expert on Pension Reforms
· Post-graduate degree in Economics, Finance or other relevant social science discipline;
· At least 15 years of relevant experience in social protection and public service pension reform in developing countries. Experience working in Pakistan and the Asian region will be preferred.
Demonstrable knowledge of global experiences with contributory pension reforms including policy advice, academic research and participation in high-level international knowledge networks
Values and Obligations
· All members of the SEED team are expected to adhere to the following values and obligations:
· At all times working collaboratively and openly with other members of the SEED team, proactively providing guidance, advice and sharing experiences in order to solve problems, overcome challenges and manage risks together.
· Free and open sharing of information gained from government counterparts, FCDO or other international projects with other members of the team.
· Respect for the confidentiality of the SEED team’s discussions, assessments, decisions and plans or agreements with FCDO; sharing information with external parties only when authorised to do so by the Team Leader or Deputy Team Leader.
· Adhering to decisions taken by the programme’s leadership, and taking collective responsibility for implementing those decisions and communicating them to counterparts or other external parties.
· Ensuring they have an accurate understanding of policies and decisions made by FCDO that relate to SEED, and respecting and adhering to those policies.
· Complying with the channels set out by ASI for all communications with FCDO through the SEED leadership structure.
· Careful coordination with other team members of communications and meetings with government counterparts to ensure coherence of technical advice and as efficient use of counterparts’ time as possible.
· Constant monitoring of risks to the delivery of SEED activities and achievement of objectives, as well as the reputation of SEED and FCDO, and swift referral of those risks to the Team Leader and Deputy Team Leader.
· Advisers are obliged to look out for and report human rights abuses known and rumoured to have taken place connected with or undertaken by our counterparts. In the event that advisors gain information about any such abuses they should report the matter in line with the procedure contained in the SEED Human Rights Assessment and Framework document.
· Professional coordination with other internationally funded programmes supporting SEED, including briefing those programmes when requested by the Team Leader or Deputy Team Leader.
· Contribute constructively to team meetings, development of workplans, risk assessment, progress reviews and report writing, as well as external evaluations by FCDO or its independent evaluation advisers.
· Complying with SEED’s media policy of referring all inquiries from the media to the Team Leader and Deputy Leader before responding in any way to those inquiries.
· All meetings with officials from FCDO should be minuted and those minutes shared with the Team Leader and Deputy Team Leader at the earliest opportunity.
· Maximising the impact of the programme’s limited resources by ensuring expenditure on travel, accommodation or other costs is as efficient as possible.
· Complying with financial procedures designed to protect the financial integrity of the programme and notifying the Deputy Team Leader and Project Managers of any incidents that threaten that integrity.
· Complying with ASI’s Duty of Care and security procedures designed to ensure safety of personnel and notifying the Deputy Team Leader and Project Managers of any incidence that threaten the security of personnel or assets of the programme.
· Complying with ASI’s operational and logistical procedures designed to ensure efficient use of resources across multiple projects in Pakistan.
Compliance with Working Policies
· The consultant is expected to observe the highest ethical standards during the performance of Services related to this assignment and must comply and apply business practices that follow the Adam Smith International’s Code of Conduct available at: https://www.adamsmithinternational.com/about-us/policies/code-of-conduct-2018/.
· The consultant is expected to apply zero tolerance to terrorism or the financing of terrorism; bribery or corruption of any kind; human trafficking or modern slavery; safeguarding or child protection breaches, money laundering, fraud, or tax evasion; and discrimination. The consultant is expected to use reasonable endeavours to give effect to any reasonable request from Adam Smith International to adjust working practices for this purpose or otherwise to promote positive social or environmental impact.
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