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December 2024

Pensioners of Radio Pakistan in Gilgit-Baltistan demand overdue benefits

Last week, a determined group of retired employees from Radio Pakistan marched through the streets of Pakistan-occupied Gilgit-Baltistan (PoGB), voicing their frustrations over delayed retirement benefits and pensions that remain unpaid despite years of service. The demonstrators, a coalition of former staff who dedicated decades of their lives to the national broadcaster, gathered to demand immediate action from the government, shedding light on the financial hardships they currently face. Organised by a committed faction of people who have retired, the lively...

Pakistan. Can lower retirement age cut pension bill?

THE country’s federal pension bill currently exceeds Rs1tr, with Rs260bn allocated for civil servants and Rs750bn for armed forces. Its magnitude is as staggering as its growth rate, which is outpacing the increase in revenue, making it unsustainable without holistic reforms. As it stands, the government is spending more on pensions than the cost of running the bureaucracy. Successive governments have tried to implement reforms to cut the pension bill with the most recent proposal being lowering the retirement age by five years from 60...

September 2024

Pakistan. Govt notifies major pensions reform

ISLAMABAD: In a major reform in the government's pensions scheme, the finance ministry issued three office memoranda on Tuesday to notify the new criteria on the recommendation of the Pay and Pension Commission 2020. According to the documents available with The Express Tribune, the federal government fixed the period of family pension at 10 years after the death of the retired employee, however, in case of a special child, the family pension would continue for life. The period of special...

July 2024

Pakistan. Govt Employees Pension Updates: Government Implements Sweeping Pension Reforms

The Pakistani government has announced major reforms to its pension system, aimed at addressing the rising costs and ensuring long-term sustainability. These changes, effective from July 2024, follow recommendations from the Pay and Pension Commission of 2020 and introduce new regulations to streamline pension payments. Key aspects of the reforms include: Gross Pension Calculation: The gross pension amount will now calculated as 70% of the average salary over the last 24 months of service before retirement, ensuring a fair basis...

Pakistani govt ends multiple pensions, limits family payouts amid major reforms

Pakistan's pension system saw major amendments under Pay and Pension Commission of 2020 to deal with future increase in pension costs. The incumbent government implemented new regulations restricting multiple pensions and limiting pension payments to family members to maximum of 10 years. Under latest reforms, the gross pension amount will now be calculated as 70 percent of the average pensionable earnings received during the last 2 years of service before retirement. Finance Division made following key amendments which will be effective from...

May 2024

Pakistan mulls pension reforms as government moves to curtail expenditure ahead of IMF talks

The Pakistan government said on Tuesday it was vital to reform the country’s pension system, including by raising the retirement age, to mitigate expenditure as Islamabad aims to save the system billions of dollars per year, with a committee formed to propose recommendations. The belt tightening moves come as Islamabad — which is facing a balance of payment crisis — is in talks with the International Monetary Fund (IMF) to secure a new long-term bailout deal. In the past, Pakistan...

February 2023

Pakistan stops salaries, pensions as economic crisis worsens

The cash-strapped Pakistan government has reportedly instructed the Accountant General of Pakistan Revenues (AGPR) to halt the clearing of all bills, including salaries and pensions, of federal ministries and attached departments until further notice. According to The News, the move comes as the country is reeling under economic crisis, which is causing difficulties in operational cost-related releases. However, the exact the reason for the same is not known. The report cited, the salaries and pensions of defence-related institutions have been cleared...

August 2021

Pakistan’s unsustainable public pension system

In the last ten years, while Pakistan’s tax revenues increased by 2.7 times, the pension bill from the federal government, which includes military pensions (36 percent of the total annual pension liabilities), increased by 5.2 times. The local toll is said to be even higher, with numbers estimated at 7.1 times. Since 2013, numbers of government retirees have increased by 25 percent; however, the pension expense has increased by 432 percent from Rs 55 billion to Rs 238 billion. This does not...

August 2020

Pakistan. The politics of pension reform

Last week, Prime Minister Imran Khan expressed his resolve to address the pension issue. It is the first time the issue of pension has found a space on the national policy radar and caught the sitting PM’s attention. To address the pension problem, the PM must sort out its economics, politics and process. I have written extensively on the economics and process, but not as much on politics. Nonetheless, politics remains the thorniest part. Considering that any reform could...

July 2020

Pakistan caps pensions and salaries on brink of Covid-19 financial collapse

Pakistan’s financial woes are going from bad to worse as the national fiscal deficit surges to over 7% of gross domestic product (GDP) and could breach 9-10% as state revenues dry up amid Covid-19 economic devastation. That’s raising questions among analysts and business executives of whether the country is headed towards a budgetary blowout-induced financial collapse. Approved by the National Assembly on June 29, Pakistan’s 2020-21 budget is notable for a 3.4 trillion rupees (US$20.7 billion) fiscal gap that...