Pakistan Implements Major Pension Reforms Amid Financial Pressures

Pakistan's government has banned double pensions and adjusted pension calculations to meet conditions set by financial institutions like the IMF. It now bases calculations on the last 24 months of service, addressing rising pension liabilities. These sweeping reforms aim to stabilize the country's financial obligations.

The Pakistan government has enacted significant changes to its pension regulations, banning the receipt of dual pensions from the national treasury as part of a broader strategy to align with stipulations from international bodies such as the International Monetary Fund (IMF) and the World Bank.

According to reports from The News International, the methodology for calculating pension benefits has shifted. Previously, pensions were calculated based on an employee's salary over the last 30 years; however, the new system considers the average earnings over the 24 months preceding retirement. This shift comes amid growing concerns over ballooning pension liabilities.

A senior official highlighted the urgency of these reforms, noting the mounting financial obligations similar to the increasing debt burden. Combined pension liabilities for Pakistan's central and provincial governments are pegged at PKR 40 to 45 trillion. The Ministry of Finance's Regulation Wing has outlined that eligible individuals may only receive one pension, with exceptions for certain cases like spousal entitlements. The reform strategy is immediate, aiming to curb future fiscal pressures.

(With inputs from agencies.)