The Pakistan government has implemented pension reforms for retired employees, as outlined in a recent finance ministry notification.
According to informed sources, under the new regulations, retirees who return to work will permanently forfeit their pension entitlements and only receive a salary from their re-employment.
The policy dictates that retirees can only draw a pension; rejoining any organization means giving up their pension for good. However, if a retiree’s spouse is still employed, the pension payments will continue until the spouse retires. Additionally, pension calculations will be based on the average salary from the last 24 months before retirement.
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This new approach will likely reduce overall pension expenses because annual pension increases will also be determined using the average salary. These changes stem from the Pay and Pension Commission’s recommendations to reduce annual pension costs.
The International Monetary Fund (IMF) has been briefed on these reforms, leading to the issuance of a formal notification by the Ministry to enforce these new rules for all future retirees.
Read: Sindh Govt Amends Civil Service Act to End Pensions for New Employees
Earlier, The government revealed salary and pension increases in the 2024-25 Budget. These adjustments featured a 25% provisional relief allowance boost for employees up to grade 16 and a 20% rise for officials in grades 17 to 22. Furthermore, a 15% hike in federal employee pensions was approved.
