In the 2024 Budget, the federal government has proposed 13 amendments to the pension scheme to reorganize pension benefits and manage costs more efficiently.
Key Points:
- Gross Pension Calculation: Employees will now receive a pension equivalent to 70% of their average salary from the last 24 months of service before retirement.
- Voluntary Retirement Option: Employees with 25 years of service can opt for early retirement, with annual pension reductions ranging from 3% to 20% until age 60.
- Ban on Multiple Pensions: The government has prohibited receiving multiple pensions and limited pension payments to family members to a maximum of 10 years.
- Pension Fund Establishment: Savings from reforms will fund a new pension fund, and a contributory scheme for new entrants will begin on July 1, 2024.
- Review and Implementation: The amendments were proposed by the Pay and Pension Commission-2020 to curb rising pension expenditures and were implemented following consultations with key ministries.
