IMF, WB demand: Ban imposed on govt employees' double pension

ISLAMABAD: The government has slapped a ban on receiving double pension from national exchequer in order to implement the demands of multilateral creditors, including the International Monetary Fund (IMF) and World Bank.

The government has also decided to calculate pension emoluments on the basis of 24 months prior to retirement of employees.

There was a proposal that the employees shall be entitled to a gross pension based on 70 percent of average pensionable emoluments drawn during the last 36 months of service prior to retirement. At the moment the gross pension is calculated on the basis of last 30 years of drawn salary. Now this formula has been changed and pension emoluments will be calculated on the basis of 24 months prior to the retirement.

This step has been undertaken by the federal government while ascertaining the fact that the changes in pension are the dire need of the hour because pension liabilities are witnessing a steep surge.

A top official told The News on Wednesday night that the pension reforms were necessary as the future obligations were mounting just like on the pattern of escalating debt burden. The Centre and four provinces’ liabilities on pension bill are estimated close to Rs40 to 45 trillion keeping in view the size of the public sector at existing levels.

The Regulation Wing of the Ministry of Finance issued different notifications stating that on the recommendations of Pay and Pension Commission-2020, it has been decided that henceforth, in an event where a person becomes entitled to more than one pensions, such person will only be authorised to opt to draw one of the pensions, provided that:

i) Where an in-service federal government employee becomes entitled to a pension, such employee will not be eligible to receive such pension.

ii) The in-service/ pensioner spouse will be eligible for pension of his/ her spouse in addition to his/ her own pay/ pension.

According to another notification for calculation of emoluments for the purpose of pension, it has been decided that pension will be calculated on the basis of average of pensionable emoluments drawn during last 24 months of service prior to retirement.

According to yet another notification, it has been decided that future increase methodology in pension will be as under:

a) The net pension [Gross Pension less Commuted portion of Pension] calculated at the time of retirement will be termed as baseline pension. Any increase in pension will be granted on baseline pension.

c) Each increase will be maintained as a separate amount until the time the federal government decides to review and authorise any additional pensionary benefits.

d) Baseline pension will be reviewed by Pay and Pension Committee after every three years. The current pension of existing pensioners will now be considered as baseline pension. The baseline pension is deemed to include restored commuted portion of pension as and when restored. Existing instructions stand amended with immediate effect, the ministry said.