Government Imposes New Conditions on Pensions to Meet IMF Demands!

The federal government has introduced significant reforms to the pension system in Pakistan, aiming to meet conditions set by the International Monetary Fund (IMF), the World Bank, and other creditors. These changes are designed to reduce the country’s growing financial burden and stabilize its economic future.

One major change is the ban on double pensions for government employees. This means individuals who were eligible to receive multiple pensions must now choose only one. However, spouses who are pensioners or actively employed will still be entitled to receive their partner’s pension along with their own.

Another key reform is the adjustment of pension calculations. Previously, pensions were calculated based on the salaries drawn during the last 30 years of service. Now, the government has shifted to a new formula, basing pensions on the average emoluments received in the last 24 months of service before retirement. This change ensures a more focused and realistic approach to pension distribution.

Government Imposes New Conditions on Pensions to Meet IMF Demands

The process for increasing pensions has also been revised. Future pension increments will now be calculated as the gross pension amount minus the commuted portion taken at retirement. These increments will be recorded as separate amounts and will remain unchanged until further notice. Every three years, the government will conduct a thorough review to reassess and adjust the baseline pension.

The Ministry of Finance’s Regulation Wing has issued formal notifications to implement these reforms. Officials have emphasized the urgent need for these changes, pointing to the rapidly escalating pension liabilities that mirror the country’s soaring debt levels. The government believes these measures are crucial to managing financial pressures and fulfilling international obligations while ensuring fairness in pension distribution.

These new rules reflect the government’s commitment to balancing fiscal responsibility with the welfare of its retirees. While these changes may require adjustments for those affected, they are an essential step in safeguarding Pakistan’s economic stability.