Pakistan's government has finally green lit a series of pension reforms aimed at tackling the country's growing pension burden. These measures, approved by the Economic Coordination Committee (ECC), are designed to make the pension system more sustainable in the long run. Key measures include freezing certain pensions and limiting family benefits to a duration of 10 years. Under the new regulations, pensions will be calculated based on 70% of the average salary from the last 24 months prior to retirement. These changes come in response to mounting concerns over the sustainability of pension expenditures, which have been steadily increasing. The Economic Coordination Committee (ECC), chaired by the Finance Minister, finalized the reforms following thorough deliberations.

The reforms, outlined in a recent summary sent to various ministries for review, emphasize the need to manage pension costs effectively while ensuring continued support for deserving employees and their dependents. The Pay and Pension Commission (PPC) 2020, tasked with reviewing pension schemes, proposed amendments aimed at curbing future financial burdens without compromising on the welfare of retired personnel and their families. These recommendations, now approved and set to take effect as per the Budget Speech 2023-24, mark a significant step towards sustainable public expenditure management in Pakistan.

Credit: Independent News Pakistan