Future Methodology of Increase in Pension of Federal Government Pensioners
Future methodology of increase in pension of Federal Government Pensioners would be in reference to Government of Pakistan Finance Division (Regulations Wing) Office Memorandum F.No. 9(3)R-6/2024-403 dated 1st January, 2025. In this Office memorandum, Finance Division issued “FUTURE INCREASE METHODOLOGY IN PENSION”. It is clarified that how the pension would be increased in future. Pensioners of Federal Government will receive increase in pension according to the fresh rules.
In above memorandum, it is informed that on the recommendations of Pay and Pension Commission-2020, it has been decided that henceforth future increase methodology in pension shall be as under:
- a. The net pension [Gross Pension less Commuted portion of Pension] calculated at the time of retirement will be termed as baseline pension.
- Any increase in pension shall be granted on baseline pension.
- Each increase shall be maintained as a separate amount until the time, the Federal Government decides to review and authorize any additional pensionary benefits.
- Baseline pension will be reviewed by Pay and Pension Committee after every 3 years. Provided that the current pension of existing pensioners on the date of issuance of this O.M. shall be considered as baseline pension. Provided further that baseline pension is deemed to include restored commuted portion of pension as and when restored. Existing instructions on the subject shall stand amended to the extent of above with immediate effect.
In the above quoted memorandum, it is clarified that the net pension of an ex-employee which is calculated as Gross Pension less commuted portion of pension, calculated at the time of retirement will be termed as baseline pension. This is fresh rule. Earlier increase in pension was accumulated every time. Now the baseline of the pension will be set and further increase in pension will be placed in separate. Thereafter, in future every increase in the pension will be calculated with the baseline pension. Each increase in pension of a retiree will be maintained as a separate amount. However, if the Federal Government decides to review it, the pensioner will get additional benefits.
Baseline pension will also be reviewed by “Pay and Pension committee” after every three years.
However, with the passage of time different pension reforms have been made for the employees of Federal Government as well as provincial government. Now, the baseline pension is very important to know. In future, baseline pension would be main figure of your pension through which commuted pension, increase in pension and other benefits of pension will be given to the federal government employees and provincial employees of Pakistan.
