The federal government is contemplating decreasing the retirement age of civil servants from 60 to 55 years. Prime Minister Shehbaz Sharif has been briefed on the proposal but the approval has not been made.
If this comes into effect, it would apply solely to civil servants and many bureaucrats could end up retiring early. However, this move is being resisted by the bureaucracy.
Ministry of Finance officials are also looking into the amendments regarding the Federal Secretariat Allowance, which has remained unchanged for the last eleven years. They are also working on an IMF proposal to extend the Contributory Pension Scheme to all existing civil servants and not only to the new entrants.
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The increase in pensions was pegged at inflation levels to cope with the burden of rising expenditure on pension arrangements. The budget for this financial year included Rs. 1,014 billion for pensions after a 15% increase already enforced. From then on, it would be adjusted according to inflation data from the State Bank of Pakistan, as recommended by the Pay and Pension Commission 2020.
In a similar development, the Government of Sindh has approved the Sindh Defined Contributory Pension Scheme 2024. This scheme stipulates that civil servants engaged or regularized under the Sindh Civil Servants (Amendment) Act, 2024, would no longer be entitled to the traditional pension and gratuity scheme. They will instead have contributions to some specific fund made by themselves as well as the government.