Pakistan government is likely to end lump sum increase in the pension of retired employees, ARY News reported on Thursday, quoting well-placed sources.
As per details, there is a possibility that the government may phase out lump sum hike in pensions for retired public employees.
The Finance Ministry has indicated that pensions could see an 80% increase to the inflation data of the last 2 years. The Pakistani government announced a 15% increase in pensions during the current fiscal year.
The government is aiming to bring inflation under control to single digits in the upcoming fiscal year.
The new pension adjustment method is part of efforts to reduce the growing pension burden on the national budget. This fiscal year, the government allocated Rs 1,014 billion for pensions, as per official documents.
The proposal to link pension increases to inflation was initially suggested by the Pay and Pension Commission 2020. Inflation data to determine pension adjustments will be provided by the State Bank of Pakistan.
Read more: Govt notifies major reforms in pension policy
On September 11, the Ministry of Finance issued notifications regarding three key amendments to the pension rules.
According to the notification, the family pension will now be limited to 10 years whereas if the pensioner dies, only legal heirs will be eligible to receive the pension transfer.
The notification stated that the spouse of a deceased pensioner will continue to receive a pension for 10 years after their death. Furthermore, if a deceased pensioner’s child is disabled, they will be eligible to receive pension for life.
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