How will the new pension rule effect government employees?

The federal government has officially announced changes to the pension determination system, set to take effect from January 1, 2025.

Under the new policy, pensions will be calculated based on the average salary of the last two years of service, rather than the final salary. Additionally, employees will no longer be eligible for multiple pensions, ensuring a more streamlined and sustainable pension structure. However, government employees who were already receiving dual pensions before this date will remain unaffected.

If such individuals take up a new job after January 1, they must choose between their salary or pension.Another key change is that any final-year salary increment will not be included in pension calculations, and family pensions will now be determined based on net pension rather than gross pension.

The policy will not impact those who retired before January 1, 2025, or those who took leave preparatory to retirement (LPR), encashment, or early retirement.

These reforms aim to ensure financial sustainability while addressing concerns about multiple pensions in the government sector.