ISLAMABAD: The government has imposed a ban on receiving dual pensions from the national exchequer to implement the demands of multilateral lenders including the International Monetary Fund (IMF) and the World Bank.
The government has also decided to calculate the pension emoluments of the employees on the basis of 24 months before their retirement.
One proposal was that employees would be entitled to a gross pension based on 70 percent of the average pensionable emoluments earned during the last 36 months of service before retirement. At present the gross pension is calculated on the basis of drawn salary of last 30 years. Now this formula has been changed and pension emoluments will be calculated on the basis of 24 months before retirement.
This step has been taken by the federal government in view of the fact that pension reforms are the need of the hour as the pension liabilities are witnessing a huge increase.
A senior official told The News on Wednesday night that pension reforms are necessary as future liabilities continue to mount on the pattern of rising debt burdens. Considering the size of the public sector at the present level, the liability of the Center and the four provinces on the pension bill is estimated to be around Rs 40 to 45 trillion.
The Regulation Wing of the Ministry of Finance issued a separate notification saying that on the recommendations of the Pay and Pension Commission 2020, it has been decided that henceforth, where a person is entitled to more than one pension, such a person will be entitled to only one pension. Option to choose any one of the following, provided:
i) Where an in-service Federal Government employee becomes entitled to pension, such employee shall not be eligible for such pension.
i
As per another notification for calculation of wages for the purpose of pension, it has been decided that the pension will be calculated on the basis of the average of the pensionable wages drawn during the last 24 months of service before retirement.
According to another notification, it has been decided that the mechanism of future increase in pension will be as follows:
a) Net pension [Gross Pension less Commuted portion of Pension] The calculation at the time of retirement will be called Baseline Pension. Any increase in pension will be paid on the base pension.
c) Each increase shall be maintained as a separate amount until the Federal Government decides to review and sanction any additional pensionary benefits.
d) Baseline pension will be reviewed every three years by the Pay and Pension Committee. The existing pension of the existing pensioners will now be treated as the baseline pension. Baseline pension is deemed to include the restored portion of pension as and when restored. The ministry said that the existing guidelines have been amended with immediate effect.