Pakistan reduces pension benefits of retired civil, armed forces personnel

Pakistan government reduces pension benefits for retired civil and armed forces personnel to manage growing pension bill.

The Pakistan government has drastically reduced pension benefits of retired civil and armed forces personnel to reduce a growing pension bill which has already swelled over Rs 1 trillion, according to a media report.

The Ministry of Finance on Wednesday (January 1, 2025) issued three separate notifications to discontinue multiple pensions, reducing both the first home-take pension and also lowering the base for determining future increases in pensions, The Express Tribune newspaper reported.

After debt servicing, defence and development, the pension is the fourth largest expenditure in the budget, the paper said.

According to the Ministry of Finance's notification, on the recommendations of the Pay and Pension Commission of 2020, "it has been decided that henceforth, in an event where a person becomes entitled to more than one pension, such person shall only be authorised to opt to draw one of the pensions".

Instead of taking a pension on the basis of the last drawn salary, the new pensioner will get a pension based on the average salary of the last two years.

The Finance Ministry stated that all the existing instructions on multiple pensions should stand amended with immediate effect.

The changes will not be applicable to people who have already retired, except in cases where multiple pensions are paid.