PUBLIC NOTICE
PIA Employees' Pension Trust Fund LIABILITIES
On the instructions of our clients, a group of senior management retired employees of Pakistan International Airlines (PIAC/PIACL/PIA), we hereby inform the prospective buyers of PIA regarding significant liabilities concerning the PIA Employees' Pension Trust Fund.
Outstanding Liability:
PIA is currently indebted to the PIA Employees' Pension Trust Fund in the approximate amount of PKR 40 billion (40,000,000,000/-). Of this, approximately PKR 30 billion (30,000,000,000/-) was reported as a liability in PIA's Annual Accounts of Dec 22.
Misuse of Trust Funds:
This liability arose from the misuse of Trust funds for operational expenses, which is in violation of applicable Trust Fund regulations. Additionally, interest accrued on this liability and contributions toward the Defined Contribution (D.C.) fund scheme, which has since merged into the Pension Trust Fund, were not included in the reported liability. The actual value of the Trust Fund may, therefore, exceed PKR 40 billion.
Liability Transfer:
In a 2024 extralegal act, part of this liability, amounting to PKR 20 billion (20,000,000,000/-), was transferred to PIA-HOLDCO by the Privatization Commission of Pakistan and the PIACL.
Legal Protection:
Under Section 6 of the PIA Conversion Act 2016, all retirement benefits, whether funded or non-funded, shall not be changed to the disadvantage of employees/retirees. Moreover, Trust Fund Laws of Pakistan dictate the requirements for investment of Trust Funds and protects beneficiaries' interest.
Ongoing Litigation:
Our client has initiated a Constitutional Petition (No. 38694-2024) titled "Irshad Ghani 6, Others versus the Federation of Pakistan" before the Honorable Lahore High Court, Lahore, seeking to ascertain the accurate value of the Trust Fund and seeking assurance for continuation of privileges and rights.
Notice to Potential Buyers:
It is crucial for prospective buyers to recognize that any liabilities toward the PIA Employees' Pension Trust Fund will transfer as liabilities to the new shareholders, whether individuals or groups. Buyers must factor these potential obligations into their bid calculations, specifically. Budgetary provisions for replenishment of the Pension Fund and Anticipated costs to maintain the current level of medical and passage facilities for retirees, as guaranteed by the PIACL Act of 2016, should be considered in financial assessment.
Your diligence in considering these matters is essential for informed bidding.
The Aviation Law Firm
