Govt issues new set of rules for pension

The federal government has issued new guidelines for the new pension determination procedure.

According to the notification, the new determination procedure will come into effect from January 01.

Changes are made to streamline the pension system and prevent multiple pensions for government employees, said Ministry of Finance.

Pensions will now be calculated based on the average salary of the last two years of service, it added.

Moreover, they will no longer be eligible to receive dual or multiple pensions simultaneously.

The orders from minister specifies that the ban on double or multiple pensions will take effect from January 1. This means, the federal employees who were already receiving dual pensions before this date will not be affected.

This rule will be applicable on new employees taking the job after January 1, they will have to choose between receiving a salary or pension.

Any additional increment received in the final year of the service will not be included in pension calculations.

In another major change, family pensions will now be determined based on the net pension amount rather than the gross pension.

The new policy will not apply to those who retired before January 1, 2025, or to employees who took leave preparatory to retirement (LPR), encashment, or early retirement.