Family of deceased govt servant to receive pension for only 10 years

The federal government has introduced major pension reforms as part of the budget for the fiscal year 2025–26.

While presenting the budget in the National Assembly on Tuesday, Finance Minister Muhammad Aurangzeb said that over the past few decades, various changes were made to the pension scheme through executive orders, which significantly increased the burden on the national exchequer.

To correct this imbalance and ease the financial strain, the government has undertaken structural reforms to the pension system, he added.

Among the key changes, the finance minister highlighted that early retirements would be discouraged, and any future increases in pensions would now be linked to the Consumer Price Index (CPI), ensuring adjustments are tied to inflation.

He further announced that the duration of family pension following the death of a spouse has now been capped at 10 years.

Additionally, individuals will no longer be eligible to receive more than one pension. Retired employees rejoining government service will be required to choose between receiving a pension or a salary,  they will not be entitled to both.