Finance Ministry issues update on family pension rules

The Finance Ministry has issued a clarification regarding family pension rules, stating that young children eligible for family pension will now receive financial support until the age of 21.

The Finance Ministry has issued a clarification notification regarding family pensions. The new directive, already outlined in an office memorandum dated September 10, 2024, came into effect immediately on the same date. 

According to the ministry, the eligibility criteria for family pension, which were formulated on October 23, 2023, will remain in effect, and children will receive pension as per the preferential criteria. 

The memorandum specifies that the updated rules will apply to pensioners who are eligible for regular family pension. Children will receive the pension based on the priority criteria established by the government. 

Also Read: Pakistan introduces major changes to pension policy

In September 2024, the Finance Ministry introduced amendments to the pension scheme to manage the escalating pension costs. These amendments, outlined in three separate office memoranda issued by the ministry, were aimed at reducing the financial burden on the federal government while ensuring continued support for retired employees and their families.

According to the notifications, the period for receiving a family pension after the death of a retired employee was fixed at 10 years. Additionally, the duration for receiving a Special Family Pension was extended to 25 years. 

One of the most notable changes was the introduction of a provision for the entitled child of a deceased retired employee to receive a pension for life if the child is suffering from a disability.

The Finance Ministry also revised the conditions for voluntary retirement. It said that a minimum of 25 years of service would be mandatory for employees opting for early retirement. However, there was a penalty: those who retire early would have their pension reduced by 3% for each year they retire before reaching the official retirement age.