Govt Changes Pension Calculation Method

The federal government has introduced some big pension reforms by changing the calculation method and restricting multiple pensions.

Pensions will now be based on the average salary of the last 24 months instead of the final salary. Also, employees will no longer be eligible for multiple pensions. However, those opting for voluntary retirement will be exempt from the new formula.

Salary increments in the final year of service will no longer be included in pension calculations.

The notification clarified that days worked during the last month on the job will count as a full month for pension purposes, while family pensions will now be determined based on net pension values instead of gross amounts.

The government expects the reforms to improve pension disbursement and ensure financial sustainability. However, the public sector employees are expected to resist the changes due to potential impacts on their post-retirement benefits.