Pension Anomaly

A large number of pension anomalies and distortions exist due to which federal pensioners and widows are not being given their full entitlements. Some of the major anomalies are given below:

1. Denial of Annual Pension Increase on Gross Pension. Despite LHC and Supreme Court Verdicts, the Ministry of Finance through a new policy on Pay and Pension changed the basis of payment of annual increase from Gross to Net Pension in 2001. In clear contravention to the rules, this was applied retrospectively on pensioners who retired before 2001. This resulted in a 50% cut on the increase in pension. In response to a Writ Petition filed by the affectees, Federal Services Tribunal and Lahore High Court decided in favor of pensioners. The government of Pakistan filed an appeal before the Supreme Court which was rejected.
Ministry of Finance has hitherto declined to restore the increase in Gross Pension in defiance of the Supreme Court verdict.

2. Ad-hoc Annual Increases Granted in Pension. Six ad-hoc increases are being granted in pension on retirement to all and sundry @ 15% for 2011, 7.5% for 2015 and 10 % each for 2016, 2017, 2018 and 2019. With an accumulative effect of 81% increase, the retiring pension rises 27% above the last drawn pay of a retiree.
Presumably, these ad-hoc increases were availed by these pensioners during their service. As a result; a Major retiring in 2020, with last pay at Rs. 120,000 ends up with a pension of Rs. 152,000, Rs. 32,000 more than the last pay drawn. These increases have led to an unprecedented rise in the pension budget over the last ten years. Ironically, on one hand, the legitimate entitlement of an increase on gross pension for the old retirees has not been restored despite the Supreme Court verdict while on the other, these unjustifiable six ad-hoc increases continue to be granted even though the government cannot bear the impact.

3. Widows Pension. In July 2010, the Ministry of Finance notified a grant of an increase in the Family Pension from 50% to 75% on the Gross or Net pension as the case may be. The Auditor General of Pakistan clarified that the increase will apply to the pension last drawn by the deceased pensioner.
However, the CMA and CMA (OP) continue to calculate widows’ pension based on an old letter of 1964 resulting in actual disbursement of approx 62% of the last drawn pension (instead of entitlement of 75%). The validity of instructions contained in the 1964 letter is questionable after the issuance of instruction by the Ministry of Finance in July 2010.

4. Gratuity/Pension for Widows of Shuhada & In-Service Death (ISD) Cases and their Transfer to NOK. Gratuity granted to widows of Shuhada and ISD cases is not restored as a routine. This should be adjusted automatically without waiting for a request/claim from the widow. Another anomaly is that family pension is not transferred to children of Shuhada and ISD cases as in ordinary family pension.

5. Grant of Usual Increment. Usual increment granted in the year of retirement has been disallowed to some 30% of officers and men on grounds of ineligibility criteria in gross violation of the instructions contained in Civil Services Regulation (CSR).