The Finance Division has formally announced a 7% pension increase, effective from July 1, 2025, for all civil pensioners of the Federal Government, including armed forces retirees.
According to an official memorandum, President Asif Ali Zardari has sanctioned this pension increase, which will apply to civil pensioners paid from the Defence Estimate, as well as retired personnel of the Armed Forces and Civil Armed Forces. The increment also extends to family pensions under the Pension-cum-Gratuity Scheme of 1954, the Liberalised Pension Rules of 1977 (as amended under the Pension Service Pension Rules), and compassionate allowances granted under CSR-353.
The memorandum clarifies that “net pension” refers to the pension amount drawn up to June 30, 2025, excluding any medical allowance. This figure will serve as the baseline for calculating the current 7% rise and any future adjustments. Additionally, this extra pension will be maintained as a separate component as outlined under Finance Division O.M. No. 9(3)R-6/2024-403 dated January 1, 2025.
Where pension liabilities are shared between the Federal Government and another entity under Part IV of Appendix III of the Accounts Code, Volume I, the increase will be divided proportionately. However, this latest adjustment will not apply to pre-retirement orderly allowances or special additional pensions provided in lieu of the monetized value of a driver or orderly.