The federal government has introduced 13 amendments to the pension scheme in the Budget 2024, aimed at restructuring pension benefits and managing costs effectively.
Key Points:
- Gross Pension Calculation: Employees will now receive a pension equivalent to 70% of their average salary from the last 24 months of service before retirement.
- Voluntary Retirement Option: Employees with 25 years of service can opt for early retirement, with annual pension reductions ranging from 3% to 20% until age 60.
- Ban on Multiple Pensions: The government has prohibited receiving multiple pensions and limited pension payments to family members to a maximum of 10 years.
- Pension Fund Establishment: Savings from reforms will fund a new pension fund, and a contributory scheme for new entrants will begin on July 1, 2024.
- Review and Implementation: The amendments were proposed by the Pay and Pension Commission-2020 to curb rising pension expenditures and were implemented following consultations with key ministries.
These reforms are expected to streamline pension benefits, reduce financial strain on the government, and ensure sustainable management of pension liabilities in the future.
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