Islamabad, Jan 2: To address rising pension liabilities and fulfill conditions set by the IMF and other creditors, the federal government has introduced major reforms to the pension system.
Key Changes:
- Double Pensions Banned:
- Individuals eligible for multiple pensions must now choose one.
- However, spouses will retain the right to their partner’s pension alongside their own.
- Revised Pension Calculations:
- Calculations will now consider the average emoluments of the last 24 months of service instead of salaries from the last 30 years.
- New Pension Increment Methodology:
- Increments will apply to the gross pension minus the commuted portion.
- These will be separately recorded until reviewed every three years.
Implementation and Rationale:
The Regulation Wing of the Ministry of Finance has issued notifications to enact these changes. The government views these reforms as vital to curbing the growing pension burden, which reflects the country’s rising debt.
