The Pakistani government has implemented a ban on receiving double pensions from the national exchequer, following the recommendations of multilateral creditors like the IMF and World Bank.
In addition, the government has introduced significant changes to how pension calculations will be handled. Pension emoluments will now be based on the average salary of the last 24 months before retirement, replacing the previous method that considered the last 30 years of service. This reform comes in response to rising pension liabilities, which are expected to reach Rs 40 to 45 trillion for the federal government and provinces due to the growing size of the public sector.
Key changes include:
- Employees who are already receiving one pension will only be allowed to draw one additional pension in cases where they qualify for more than one.
- In-service employees who qualify for a pension will not be allowed to receive it until after they retire.
- A new baseline pension system will be introduced, with future pension increases tied to this baseline and reviewed every three years.
These changes aim to mitigate the mounting financial burden of pension payments and streamline the country’s pension system.
