I am sharing here the details of New Pension Reforms 2023 as per Closing Budget Speech. The Federal Finance Minister Ishaq Dar in his closing budget speech stated that the Government is introducing new Pension Reforms. In the present economic conditions of Pakistan, pension expenditure has become unsustainable. Due to the unsustainability of the expenditure of pensions, the Federal Finance Minister introduces some pension reforms in order to make them sustainable. Here are more details:

Introduction of New Pension Reforms 2023

The annual expenses of pensions are increasing rapidly and they have become unaffordable. There is an urgent need for reforms. Hence, Finance Ministry establishes a Pension Fund in the budget for the Economic year 2023-24. The work on its rules and regulations has also started in order to support pension expenses. It will help to meet the pension expenses. There is also news of a Pension Contributory Fund for the future recruited Government Employees. This fund may be of the same type as mentioned in the Contributary Fund Rules 2022 KP employees.

Two and Even Three Pensions

Finance Minister introduces Pension Reforms to make Pension expenditures sustainable.  There are a number of high-profile individuals who receive multiple pensions. They after retirement from one institution and joins another institution and receive a pension from both institutions. There are also people who are receiving a number of 3 Pensions at a time. Hence, the economic system can’t afford these increasing expenditures. There are not many resources available to meet them. By taking into account these conditions, Federal Finance Minister introduces new Pension Reforms which intend to make pension expenses sustainable and affordable for the economic system of Pakistan.

Decisions under Pensions Reforms 2023

Following Decisions by our Finance Ministry are being taken in Pension Reforms:

1. Pension From Only One Institution

Under these reforms, a retired Government officer of Grade 17 or above will be able to draw a pension from only one institution, depending on his discretion as to which of the several institutions he wants to draw a pension from.

2. Ad-Hoc Pension Allowance

At the time of calculation of pension, ad-hoc pension allowance should be included in a net pension without compounding, while the third reform would be that after the death of a pensioner, his dependent family members can receive a pension for 10 years.

3. Choose Between Pension Or Salary

In case of taking up any other employment after becoming entitled to a pension, the Government servant has to choose either pension or salary.

The above-mentioned decisions are being taken under the Pension Reforms. These steps shall be beneficial and support Economic System to come upon the increasing pension expenses.  These steps shall not only decrease pension expenses but also make them sustainable.

You may also like: Revised Pension Calculator 2022-23