ISLAMABAD – The federal government has introduced pension reforms in the federal budget for fiscal year 2025-26 budget
During the budget speech, Federal Finance Minister Muhammad Aurangzeb stated that over the past few decades, changes were made to the pension scheme through executive orders, which increased the burden on the national exchequer.
To rectify the pension scheme and reduce the financial strain on the government treasury, reforms have been implemented.
The Finance Minister said that the reforms in the pension scheme include discouraging early retirement and linking pension increases to the Consumer Price Index (CPI).
The minister further explained that in the case of the death of a spouse, the duration of family pension has been limited to 10 years, while multiple pensions have been abolished.
Additionally, if a retiree is re-employed, they will have to choose between receiving either a pension or a salary, but not both.
