Budget 2024-25: Govt to reform pension scheme

ISLAMABAD: Minister for Finance and Revenue Senator Muhammad Aurangzeb on Wednesday said that the government would adopt a three-pronged strategy to reform the pension scheme in line with international best practices.

The minister, in his budget speech in the National Assembly, said that the government had to pay unfunded pension liability, which was increasing every year.

He said after reforms in the pension scheme, the pension liability would be reduced considerably in next three decades.

The minister said that for fresh employees, a contributory pension scheme would be introduced for which the government would deposit its share every month.

Moreover, a pension fund would be created to manage the liability, he added.

Finance Minister Aurangzeb presented the Rs18.877 trillion relief-oriented federal budget for the fiscal year 2024-25.

It is pertinent to mention here that Muhammad Aurangzeb proposed 20-25 percent increase in the salaries on ad-hoc basis and 15 percent enhancement in the pensions of the Federal Government employees.

The minister said despite financial constraints, the government had decided to give 25 percent ad-hoc relief in the salaries of employees from Grade1-16 and 20 percent to Grade-17-22 employees aimed at increasing their purchase power.

He also announced to increase the minimum wages from existing Rs 32000 to Rs 37000 per month.