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Sunday, October 6, 2024

Major Amendments to Pension Rules Announced

The Finance Ministry announced significant pension reforms to reduce financial burden and support families, including new eligibility criteria, increased allowances, and deductions to discourage early retirement.

The Finance Ministry has introduced three key amendments based on recommendations from the Pay and Pension Commission 2020. According to the new rules, the family pension will be limited to 10 years following the death of a pensioner, except in the case of a disabled or special child, who will be eligible to receive the pension for life. Additionally, the period for special family pensions, such as those for martyrs, has been extended to 25 years.

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The amendments also specify that only legal heirs of a deceased pensioner will be eligible for pension transfers. To alleviate the mounting pension bill, the government has mandated a minimum of 25 years of service for voluntary retirement before the age of superannuation. These changes aim to ensure a sustainable pension framework while providing targeted support to those in need.

Early Retirement Deductions and Increased Allowances

To discourage early retirement, the ministry has announced a 3% pension deduction for federal employees who retire early, applicable to the remaining service period up to 60 years. For civil armed forces personnel, the total deduction for early retirement will be set at 20%. These measures aim to curb premature retirements and manage the pension burden more effectively.

In a separate development, the government has increased allowances for federal employees. An Adhoc Relief Allowance of 25% has been granted to employees up to grade 16, while officials from grades 17 to 22 will see a 20% increase. Additionally, a 15% increase in pensions for federal employees has been approved.