Finance ministry approves pension increase for retired employees

The Federal Ministry of Finance has issued an official memorandum outlining new measures for pension increases and payments, granting relief to employees retiring on or after July 1, 2025, 24NewsHD TV reported on Friday. 

According to the notification, “To ensure equality of treatment, it is clarified that for the Government servants who would retire on or after 01.07.2025, the baseline pension shall be the net pension (Gross Pension less commuted portion of pension) plus the following increases in pension”.

The memorandum added that five previous ad-hoc relief allowances, granted over the years, will now be included in the pension.

These include 15% in 2011, 7.5% in 2015, 15% in 2022, 17.5% in 2023, and 15% in 2024.

These five ad-hoc reliefs collectively amount to an increase of up to 70%, which will now be reflected in the net pension of the federal pensioners.

The Ministry of Finance stated that this step ensures fair treatment of all federal pensioners while streamlining the calculation process for pension disbursements.

Earlier, the federal cabinet approved a 15% increase in pensions provided by the Employees’ Old-Age Benefits Institution (EOBI), effective from January 1, 2025.

The decision was made on the recommendation of the Ministry of Overseas Pakistanis and Human Resource Development and will be funded from EOBI’s own resources.

The cabinet meeting, chaired by Prime Minister Muhammad Shehbaz Sharif, also decided to form a committee to introduce institutional reforms in EOBI.

Reporter: Waqas Aazeem