The federal government has notified amendments to family and ordinary pensions and has also imposed a 3 percent penalty on employees who retire after 25 years of service.

The notification states that the Ministry of Finance has introduced new rules regarding special family pensions, ordinary family pensions, and voluntary retirement penalties to reduce ballooning expenses.

These new rules have been issued based on the recommendations of the Pay and Pension Commission, which was established in 2020.

Under the special family pension, the remaining entitled family members shall be eligible for a pension for up to 25 years after the death or ineligibility of the spouse/first recipient.

In the case of disabled/special children of a pensioner, the special family pension shall remain admissible for the lifetime of such children.

Additionally, the rate of such pensions for eligible recipients is enhanced to 50% of the last drawn pension admissible to the first recipient for all ranks of the Armed Forces/Civil Armed Forces, without minimum/maximum limits, and transferable to all eligible heirs as per the order prescribed in Rule 12 of Pension Regulations Vol-1 (Armed Forces), 2010.

Ordinary Family Pension

The finance division states that entitled family members under the ordinary family pension shall be eligible for a maximum period of 10 years after the death or ineligibility of the spouse.

In the case of disabled/special children of a pensioner, the ordinary family pension shall remain admissible for the lifetime of such children.

For entitled children, the ordinary family pension shall remain admissible for 10 years or until the age of 21 years, whichever is later.

Previously, entitled family members were receiving pensions for a lifetime after the death or ineligibility of the pensioner.

Furthermore, the government, on the recommendations of the Pay and Pension Commission 2020, has also notified penalties on voluntary retirement.

It stated that a federal government employee may opt for retirement after 25 years of service; however, the employee shall be subject to a flat reduction rate of 3% per year in gross pension based on the number of completed months from the date of retirement to the date of superannuation. Such a flat reduction in gross pension shall be capped at 20%.

The notification added that in the cases of the Armed Forces and Civil Armed Forces, voluntary retirement penalties will apply only if retirement is sought/granted before the prescribed rank service.