In a bid to curb the mounting pension liabilities, the Pakistan government has significantly reduced pension benefits for retired civil and armed forces personnel. The move comes as the country’s pension bill has surged past Rs 1 trillion, straining the national budget.
The Ministry of Finance issued three separate notifications on Wednesday, announcing measures to cut back on pension payouts. The new policies will end the provision of multiple pensions, reduce the initial pension amount, and lower the base used to calculate future pension hikes. These changes are part of the government’s broader efforts to rein in its spending amid growing fiscal challenges.
Pension expenditure has become one of the largest budgetary items for the government, ranking fourth after debt servicing, defense, and development spending. The substantial rise in pension costs has placed increasing pressure on public finances, prompting the authorities to implement these cost-saving measures.
The pension reforms are expected to have a significant impact on the financial security of retired personnel, particularly those who rely on these benefits as their primary source of income. Critics argue that while the move may ease fiscal pressures in the short term, it could further strain the livelihood of retirees who served in various government sectors, including the military.
As the government grapples with balancing its budget, these pension cuts reflect the difficult choices being made to address Pakistan’s growing fiscal challenges.
