Major changes to federal pension rules implemented

ISLAMABAD: The Finance Division has implemented three major amendments to the Federal Employees’ Pension Rules based on the recommendations of the Pay and Pension Commission 2020.

An official notification to this effect has been issued, and an office memorandum sent to all ministries and divisions for implementation. These amendments will take effect immediately.

According to the office memorandum regarding amendments to general family pensions, the duration of pension for remaining eligible family members has been limited to a maximum of 10 years in the event of a spouse’s death or disqualification. If the deceased pensioner’s child is disabled, he/she will receive a lifelong pension. For eligible children, the general family pension will be provided for up to 10 years or until the child reaches 21 years of age.

Under the amendments to special family pensions, if the pension-receiving spouse dies or becomes disqualified, the family members will receive pension benefits for up to 25 years. If the pensioner’s child is disabled, the pension will be lifelong. For all armed forces and civil armed forces ranks, there has been a 50% increase in the pension rate for the first pensioner. This pension can be transferred to eligible heirs. The third amendment introduces a penalty for employees opting for voluntary retirement.

According to this new amendment, employees who retire voluntarily after 25 years of service will face a pension reduction. The reduction will be 3% and will apply from the retirement date. A 3% deduction will be made from the monthly gross pension for the remaining service period up to 60 years of age, with a maximum reduction limit set at 20%.