Govt Employees Likely to Get Big Increase in Their Salaries and Pensions in July

The federal government wants to increase the salaries and pensions of its employees with increments of up to 10-15 percent in the upcoming fiscal year budget.

The Ministry of Finance wants a 10 percent salary increase, but a few factors may compel it to increase salaries by up to 15 percent in the 2024-25 budget, reported TheNews.

The government is reviewing car monetization allowances of up to 25 percent for senior officers. Currently, grade 20 officers receive Rs. 67,000, grade 21 officers Rs. 77,000, and grade 22 officers Rs. 87,000 per month in car monetization handouts.

Pension reforms are also on the budget agenda, including a proposed tax on pensions exceeding Rs. 100,000 per month. Different slabs for higher pensions may be introduced. It is also possible that the next budget may extend the retirement age for public sector employees by up to five years.

Key pension reform proposals include:

• Gross pension based on 70 percent of the average salary over the last 36 months of service.
• Early retirement option after 25 years with a 3 percent annual penalty on the pension.
• Separate handling of pension increases from retirement calculation until further government review.
• Family pensions limited to 10 years, extended to 20 years for Shuhada pensions, and lifetime for disabled/special children.
• Option to commute up to 25 percent of the gross pension at retirement.
• Pensioners re-employed in public service can choose between pension or salary, and those entitled to multiple pensions can opt for one.