Govt of Pakistan introduces new pension calculation method

The federal government has introduced a new method for calculating pensions as part of broader reforms aimed at reducing expenditures. The changes, implemented through an official notification, will affect all government employees and pensioners.

The reforms come amid ongoing pressure from the International Monetary Fund (IMF) to restructure Pakistan’s financial system and cut costs.

Key Changes in the Pension System

As per the notification, pensions for retired government employees will now be calculated based on the average salary of their last 24 months of service. Additionally, retirees will no longer be allowed to withdraw more than one pension.

However, the revised pension policy will not apply to individuals who opt for voluntary retirement.

Pakistan’s IMF Negotiations

Meanwhile, Finance Minister Muhammad Aurangzeb has expressed confidence in Pakistan’s ability to successfully complete the first review of its $7 billion IMF bailout program. Speaking to international media, he highlighted that the review process includes two rounds of discussions—technical and policy-level talks.

The negotiations between Pakistan and the IMF began on Tuesday in Islamabad. During the meetings, Finance Minister Aurangzeb briefed the IMF delegation on Pakistan’s economic situation and its reform strategy. Sources indicate that the Green Initiative report, presented by the Ministry of Finance and Planning, was also discussed.

The delegation was provided insights into climate-related projects under the initiative, prepared at the IMF’s request.

These developments signal Pakistan’s commitment to financial discipline and economic restructuring in line with global standards.