ISLAMABAD: The government is all set to issue a new notification of pensions of retired government employees to be effective from July 1, 2024, according to which changes have been made in the pensions in future.
According to the draft notification, calculation of pensions will be made as per follows : (i) Calculation of Gross Pension: federal government employees shall be entitled to a gross pension based on 70% of average pensionable emoluments drawn during the last 24 months of service prior to retirement; (ii) Voluntary retirement penalties: A Federal Government employee may opt for retirement after putting in 25 years of service, however, the employee shall be liable to a flat reduction rate of 3% per year in gross pension based on the number of completed months from the date of retirement to the date of superannuation. Such flat reduction in gross pension shall be capped at 20%. Provided that in cases of Armed Forces and Civil Armed Forces voluntary retirement penalties will apply only if retirement is sought/granted prior to the prescribed Rank Service.
Key highlights of Budget 2024-25
Future increase methodology in pension: (a) the net pension calculated at the time of retirement will be termed as baseline pension; (b) any increase in pension shall be granted on baseline pension,(c) each increase shall be maintained as a separate amount until the time the Federal Government decides to review and authorize any additional pensionary benefits;(d)baseline pension will be reviewed by Pay and Pension Committee after every 3 years provided that the current pension of existing pensioners on the date of issuance of these amendments shall be considered as baseline pension.
And provided further that baseline pension is deemed to include restored commuted portion of pension as and when restored.
Ordinary Family Pension, after the death or ineligibility of the spouse, shall be admissible to remaining entitled family members for a maximum period of 10 years, provided that (i) in case of disabled/Special Children of a pensioner, the Ordinary Family Pension shall remain admissible for life of such children; (ii) in case of the entitled children, Ordinary Family pension shall remain admissible for 10 years or till the age of 21 years whichever is later.
Special Family Pension: (i) Special Family Pension, after the death or ineligibility of the spouse/first recipient, shall be admissible to remaining entitled family members for 25 years after the death or ineligibility of spouse/first recipient; (ii) ln case of disabled/Special Children of a pensioner, the Special Family Pension shall remain admissible for life of such children ; and (iii) rate of such pension for eligible recipients is enhanced to 50% of last drawn pension admissible to the first recipient for all ranks of Armed Forces/Civil Armed Forces without min/max limits and transferable to all eligible heirs as per order prescribed in Rule 12 of Pension Regulations Vol-l (Armed Forces), 2010.
Pension in case of reemployment appointment after retirement: In an event where a pensioner of the Federal Government after the age of 60 years is re-employed/appointed in public service after retirement whether on regular/contact basis or whatsoever mode of employment, the pensioner shall have the option to retain either his/her pension or to draw the salary of said employment during the currency of that employment.
Multiple pensions: In an event where a person becomes entitled to more than one pension, such person shall only be authorized to opt to draw one of the pensions, provided that: (i) where an in-service Federal Government employee becomes entitled to a pension, such Federal Government employee shall not be eligible to receive such pension; and (ii) the in-service/pensioner spouse shall be eligible for pension of his/her spouse in addition to his/her own pay/pension.
Annual increase in Pension: annual increase in pension shall be granted at 80% of average inflation rate for the last two years.
For this purpose, the Year-on-Year Consumer Price Index (CPI) as announced by State Bank of Pakistan shall be used as reference.
Copyright Business Recorder, 2024