Pakistan Implements Pension System Reforms for Financial Stability

Pakistan has recently taken significant steps to revamp its pension system through the Pay and Pension Commission of 2020. The primary goal of these changes is to address the expected increase in pension expenses and ensure the long-term sustainability of the system.

Under the new rules introduced by the government, individuals will no longer be able to receive multiple pensions. Additionally, pension payments to family members will be capped at a maximum of 10 years. One of the key modifications includes calculating pensions as 70 percent of the average earnings received during the final 2 years of service before retirement.

The Finance Division has announced that these amendments will be enforced starting July 2024. The reforms are designed to streamline the pension system and enhance cost management by limiting the number of pensions an individual can receive and setting a duration cap on pension payments to family members.

The recent changes to Pakistan's pension system mark a significant milestone in ensuring financial stability and efficiency. By implementing these reforms, the government aims to better manage pension costs and secure the future of the pension system for all stakeholders.