Latest Govt. Employee Pension Reform in 2024

In 2024, the government made some important changes to the pension reform for its employees. These changes have caught the attention of many workers, creating a mix of curiosity and worry. In this discussion, we’ll take a closer look at why these changes were made and how they might affect the lives of government employees.

Let’s explore what this pension reform means for those who work in public service.

What is pension?

Pension in Pakistan is a financial arrangement that provides individuals with a regular income after they retire from their jobs. This system is designed to ensure financial security for retirees during their post-employment years.

The benefits of having a pension in Pakistan extend beyond just financial support.

1. Income Security: A pension serves as a reliable source of income for individuals in their retirement phase when they are no longer earning a regular salary. It helps them maintain a decent standard of living and covers basic living expenses.

2. Retirement Planning: With a pension plan, individuals can plan for their retirement by contributing a portion of their earnings throughout their working years. This ensures that they have a nest egg to rely on when they retire.

3. Financial Independence: Having a pension provides financial independence to retirees. They are not solely dependent on family or external support, which can lead to a more dignified and self-sufficient retirement.

4. Social Stability: Pensions contribute to social stability by alleviating the burden on the family or social welfare systems. Retirees with pensions can support themselves, reducing the strain on their families and the broader social safety net.

5. Employee Loyalty and Satisfaction: Companies that offer pension plans often find that it increases employee loyalty and satisfaction. Knowing that there is a financial safety net in retirement can contribute to a more motivated and committed workforce.

Changing Procedures in pension rules by Federal Government in 2024

Subject of AmendmentsThe proposed changes pertain to the pension scheme for existing pensioners and federal government employees.
Source of RecommendationsThe amendments are recommended by the Pay and Pension Commission of 2020.
Deadline for Feedback (Finance Division)The Finance Division has requested views/comments on the proposed amendments by 15 January 2024.
Deadline for Feedback (Ministry of Home Affairs)The Ministry of Home Affairs has requested para-wise comments from all agencies by 14 January 2024.
Approval MechanismAbsence of response within the stipulated period will be considered as approval of the proposed amendments.

Pension reforms

In Pakistan, various types of pension reform exist, including government pensions for public servants and private pension plans offered by some companies. The government has also introduced programs to extend pension benefits to a broader segment of the population, recognizing the importance of financial security in retirement.

Overall, pensions play a crucial role in ensuring the well-being of individuals during their post-retirement years in the context of Pakistan.

The letter says that the Finance Division wants people’s thoughts on some proposed changes by January 15, 2024. After that, they plan to take these ideas to the Federal Cabinet for approval. The Ministry of Home Affairs also asked all agencies to share their comments by January 14, 2024.

Both of these requests show how they’re trying to get input from different groups before making any decisions. It’s important for everyone to share their thoughts on time so that the decisions can be well thought out and fair.

List of Changes Proposed in Pension Rules 2024

SNOExisting ruleProposed reforms
aMultiple pension is authorized to individuals in case of death of spouse/ children and father if applicableOnly one pension is entitled. Option available to the select high one and surrender all other.
bIndividual if re-employed, in the public sector can get pay and pension both from Federal Government.If re-employed, both benefits will not be authorized from Federal Govt. i.e. either pay or pension will be authorized during re-employment.
cPension was entitled to 3 tier i.e. unmarried/ widow 7 divorced daughter for life.Pension is now restricted to 3rd tier for only 10 years. Few exemption also include:-Shuhada families-20 yearsDisabled son/daughter for line time.
dEach year increase in pension is authorized on gross/ net pension i.e. compounding effect which means % increase is given on last drawn pension.Increase will be given on gross net pension i.e. authorized at the time of retirement (net/gross) as the case may be.In future increase in pension has been indexed with CPI (80% of last 3 year) with maximum 10% increase per annum.
eIndividual can request for premature retirement with full benefits on case to case basis.Early retirement discouraged and minimum 3% and maximum 10% penalty will be admissible to retiring individual.
fPension granted on last pay drawn of retiring individualPension will be calculated on the average of last 3 years pay (36x months).
gCommutation/pension granted to retiring individual with the ration of 35% & 65%Commutation/pension formula changed to 25% & 75% respectively.
hRestoration of pension after completion of number of years purchased.Restoration of pension has been discontinued in future.
iPension was given as per Defined Benefit Model (Gov. to bear all expenses).Establishment of pension fund by the Govt. Pension will be given as per Defined Contributory Model (DC)
Main changing in the existing rules
amendment pension reforms in 2024

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The government of Pakistan, through the Ministry of Interior, has issued a letter to various government agencies regarding proposed amendments to the pension reform for current pensioners and federal government employees.

These amendments are in response to recommendations made by the Pay and Pension Commission in 2020. The Finance Division has set a deadline of January 15, 2024, for necessary opinions and comments on the proposed changes, intending to present them for approval before the Federal Cabinet.

Simultaneously, the Ministry of Home Affairs has urged all agencies to provide their para-wise comments by January 14, 2024. It is emphasised that a lack of response within the stipulated period will be considered as approval of the proposed amendments.

changes in pension rules in 2024


The proposed amendments in the pension scheme for existing pensioners and federal government employees are under consideration by the government of Pakistan. All relevant agencies have been requested to share their opinions by January 14, 2024.

The details of the specific amendments in the pension reform are not yet disclosed by the Ministry of Interior. The letter mentions that the recommendations are based on the suggestions of the Pay and Pension Commission of 2020, but specific details about the nature of these recommendations are not provided.

The impact of the proposed amendments on pensioners and employees is not clear at this time. The Ministry of Interior has not provided information on where individuals can obtain more details about the proposed amendments.

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