Finance Ministry approves increase in pension to government employees

ISLAMABAD: The Ministry of Finance has granted significant relief to retired federal government employees by approving an increase in pensions.

An official Office Memorandum regarding this decision has been issued.

“To ensure equality of treatment, it is clarified that for the Government servants who would retire on or after 01.07.2025, the baseline pension shall be the net pension (Gross Pension less commuted portion of pension) plus following increases in pension”, the memorandum stated.

The Ministry announced that five previous ad-hoc relief allowances, granted over the years, will now be included in the pension. These include 15% in 2011, 7.5% in 2015, 15% in 2022, 17.5% in 2023 and 15% in 2024.

These five ad-hoc reliefs collectively amount to an increase of up to 70%, which will now be reflected in the net pension of the federal pensioners.

Read More: Cabinet approves 15% increase in EOBI pensions effective from Jan 1, 2025

Earlier, the federal cabinet approved a 15% increase in pensions provided by the Employees’ Old-Age Benefits Institution (EOBI), effective from January 1, 2025.

The decision was made on the recommendation of the Ministry of Overseas Pakistanis and Human Resource Development and will be funded from EOBI’s own resources.

The cabinet meeting, chaired by Prime Minister Muhammad Shehbaz Sharif, also decided to form a committee to introduce institutional reforms in EOBI.

The committee will also deliberate on proposals to extend old-age benefits to the informal labor sector, including domestic workers, agricultural laborers, and other marginalized employment categories that have been previously overlooked.

The reforms aim to ensure that these underserved groups receive the social security they deserve.

Additionally, the cabinet approved the initiation of legal procedures for the draft Sea Carriage Shipping Documents Bill, 2025, based on a recommendation from the Ministry of Maritime Affairs.

On the recommendation of the Ministry of National Health Services, the cabinet approved a five-year extension of exemption on the import of anti-cancer, cardiac, and life-saving drugs used in hospitals and related healthcare institutions.

These medicines are considered vital for saving human lives, and the exemption is intended to ensure their prompt availability.