Draft of pension reforms for federal employees ready

ISLAMABAD: The caretaker government has decided make pension reforms in the light of the report of Pay and Pension Committee.

The Finance Division has sought the opinion of Federal Ministries and Divisions including the Establishment Division before implementing the reforms. 

After the approval of the federal cabinet, the draft of the reforms will be finalized and a notification of the implementation will be issued. Under the new reforms, federal government employees will be entitled to a gross pension based on 70% of pensionable benefits earned during the last 36 months of service prior to retirement. The Establishment Division is of the view that this decision will cause concern among employees who retire in the last year of service. Under the new reforms, to discourage early retirement minutes, a penalty of three to ten percent can be imposed. The Establishment Division is of the view that the request of some employees for early retirement is genuine, so this penalty should not be imposed.

The Establishment Division has given an opinion to the Finance Division that the morale of government employees will fall with the new reforms, so to reduce the burden of pension payment, the proposal to increase the retirement age from 60 to 62 years should be considered. Any increase in pension under other pension reforms will be paid on the pension fixed at the time of retirement. Family pension shall be admissible to the remaining members of the family only for a maximum period of ten years after the death of the spouse or entitlement. In the case of martyrs, the period shall be twenty years. If any child is disabled, the pension will be for lifetime.

The formula for commutation will be changed from 35% and 65% to 25% and 75%. In case of two or more employments after the retirement, whether regular or contract, pensioner will be entitled to only one pension or salary. The annual increase in pension will be decided in the light of the consumer price index but this increase will not be more than ten percent in a year.