WEB DESK: The government has approved new pension reforms, imposing a ban on securing multiple pensions and limiting pension provision for family members to 10 years.
Under the reforms, pensions will be calculated based on 70 per cent of the average salary drawn during the last 24 months of service before retirement.
The Economic Council Committee (ECC), chaired by Finance Czar Muhammad Aurangzeb, approved the summary of the reforms.
These changes come under the terms of reference of the Pay Pension Commission-2020 (PPC2020), allowing the commission to review the pension scheme as necessary.
Authorities presented the recommendations in light of PPC2020, citing the increasing burden of pensions on the national exchequer.
Read More: Pakistan’s trade deficit shrinks 12% YoY to $24.1bn in FY24
The Ministry of Finance proposed that the savings expected from these reforms could be used to establish a pension fund.
Federal government employees will be eligible for a pension after 25 years of service. However, a flat reduction rate of 3 per cent per year in gross pension will apply based on the number of months from the date of retirement to the date of superannuation, capped at 20 per cent.
Special family pensions will be granted for 25 years after the death or ineligibility of the entitled employee’s family. For disabled children of a pensioner, the special family pension will remain admissible for life.
The rate of such pensions for eligible recipients will be increased to 50 per cent of the last drawn pension. Annual pension increases will be granted at 80 per cent of the average inflation rate for the last two years.
