ISLAMABAD: The Establishment Division has sternly opposed gross pension based on 70% of average pensionable emoluments drawn during the last 36 months of service before retirement and increasing the age from 60 to 62 years under the pension reforms. The Division has also opposed the proposal for slapping a 3 percent penalty per year on early retirement.
According to an official communication sent out from the Establishment Division to the Ministry of Finance, which was made part of the summary for placement before the ECC for approval, the matter of framing rules on pay and allowances, retirement benefits, etc. and other financial terms and conditions of service of government servants primarily falls under the domain of the Finance Division in terms of Rule 12(h) of (Part-B, consultation amongst Division) read with Sr. No.12 (16) of Schedule-II of Rules of Business, 1973.
The Establishment Division, having the responsibility vide Sr.No.10 (1) of Schedule-II of the Rules of Business, 1973 for regulation of recruitment and determination of terms and conditions of service to civil posts in connection with the affairs of the federation, has submitted a set of proposals with regard to the proposal in para-6(i) of the draft summary.
The proposal that the government employees shall be entitled to a gross pension based on 70% of average pensionable emoluments drawn during the last thirty-six months of service before retirement will be a matter of concern for employees who are promoted in the last year of their service. Calculation of pension on the average pensionable emoluments from the last thirty-six months will place them at a disadvantage vis-à-vis others due to the lower average value.
After this feedback, the government decided that the federal government employees shall be entitled to a gross pension based on 70% of average pensionable emoluments drawn during the last 24 months of service prior to retirement instead of 36 months period.
The proposal at Sr No. 2 of the draft notification related to early retirement reduction/penalty of 3% per year is too excessive & needs to be revisited, as there are instances where the government servants have genuine reasons to opt for early retirement.
On this proposal, the finance ministry proposed that a federal government employee may opt for retirement after putting in 25 years of service; however, the employee shall be liable 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 flat reduction in gross pension shall be capped at 20%. Provided that in cases of armed forces and civil armed forces voluntary retirement penalties will apply only if the retirement is sought/granted prior to the prescribed rank service The Establishment Division further states that the proposal at Sr. No. 8 of the draft notification related to annual increase in pay seems to be misplaced in the notification. “It is also relevant to mention that there has been a discussion on increasing the age of retirement from 60 to 62 in the past as an option to reduce the burden of pension liabilities. The Finance Division may consider this option to avoid adverse impact of the proposed pension reforms on the morale of government servants,” the communication concluded.