ISLAMABAD: The Ministry of Finance has provided major financial relief to retired federal government employees by approving a substantial increase in pensions.
This decision has been officially confirmed through an Office Memorandum issued by the ministry. According to the memorandum, government employees retiring on or after July 1, 2025, will have their baseline pensions calculated based on their net pension (gross pension minus commuted portion) along with several previous pension increases.
In a significant move, the government will now permanently add five earlier ad-hoc relief allowances granted in different years to the pension. These include 15% in 2011, 7.5% in 2015, 15% in 2022, 17.5% in 2023, and 15% in 2024. Combined, these increases amount to up to 70%, which will now reflect in the net pension of federal pensioners.
In a separate decision, the federal cabinet had already approved a 15% increase in the pensions provided by the Employees’ Old-Age Benefits Institution (EOBI), effective from January 1, 2025. EOBI will fund this increase from its resources.
The cabinet also formed a committee to suggest reforms for EOBI and to explore ways to extend pension and social security benefits to informal sector workers such as domestic helpers, farm laborers, and other marginalized employment groups.
Additionally, the cabinet approved the start of legal procedures for the draft of the Sea Carriage Shipping Documents Bill, 2025, based on recommendations from the Ministry of Maritime Affairs. On the health front, the Ministry of National Health Services proposed, and the cabinet approved, a five-year extension of the tax exemption on the import of life-saving drugs, including cancer, cardiac, and other essential medicines. The goal is to ensure that these critical drugs remain available and accessible across hospitals and healthcare institutions in Pakistan.
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