The government has approved significant pension reforms aimed at capping multiple pension collections and limiting family pensions to a maximum of 10 years. These changes are part of an effort to address the rising and unsustainable costs associated with pensions.
Key Highlights of the Pension Reforms
- Family Pension Limit: Pensions for family members will now limited to 10 years, ensuring a more sustainable pension system.
- Calculation Method: The pension will calculated based on 70% of the average salary of the last 24 months before retirement.
- Cost Management: The reforms aim to manage the increasing costs associated with pensions without compromising the government’s commitment to its pension philosophy.
Implementation and Review
The summary of these reforms, approved by the Economic Coordination Committee (ECC), has sent to the Ministry of Defense, Establishment Division, and Ministry of Interior for review and comments. The reforms approved under the chairmanship of the Finance Minister.
Background and Recommendations
The Pay and Pension Commission (PPC) 2020, established to review the current pension scheme, played a crucial role in recommending these reforms. The PPC 2020’s recommendations aimed at preventing future increases in pension costs while maintaining the government’s commitment to providing pensions to eligible employees and their families.
Impact on Budget 2023-24
These proposals also highlighted in the 2023-24 budget speech, reflecting the government’s commitment to sustainable pension management. Based on the PPC 2020 recommendations, the Finance Division has proposed several amendments to the pension scheme for existing pensioners and employees.
The approved pension reforms mark a significant step towards sustainable pension management. By capping family pensions to 10 years and revising the calculation method, the government aims to address the rising costs and ensure long-term sustainability of the pension system.
