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Pension expenditure to jump 23.5% in FY25

Pension expenditure to jump 23.5% in FY25
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June 14, 2024 (MLN): The federal government has set a target to disburse Rs1.014 trillion as pensions in the fiscal year 2024-25, a significant jump of 23.51% over the previous year’s revised collection.

According to the budget documents, the military would retain its status as dominant in the pension section, amounting to Rs662 billion, around 13.6% higher compared to the revised figure for FY24.

Pensions to civilians are planned at Rs220bn for FY25, down 3.51% compared to the revised number of Rs228,000 for the outgoing fiscal year.

Additionally, the expenditure from the Federal Pension Fund is set at a consistent level of Rs10bn.

Considering the difficulties faced by government employees due to reduced purchasing power from inflation, the government has announced major relief measures for them.

As pensions are being referred here, it is worth adding that it has been proposed to raise them significantly by 15% for the retired employees in the FY25 budget.

Read: Pensions hiked by 15% for FY25

This comes in addition to salary increments for employees of grades 1 to 22 and an increase in minimum monthly salary from 32,000 rupees to 37,000 rupees.

The data disclosed by the finance ministry shows the government projecting this increase in pension to result in a combined total of Rs122bn for both the civil and defense sectors.

The estimated pension expenditure constitutes 5.89% of the total current expenditure set by the government at Rs17.2tr for FY25.

Pension Table for FY25

  Revised 2023-2024 Budget 2024-2025 % Change
Military 583,000 662,000 13.55%
Civil 228,000 220,000 -3.51%
Federal Pension Fund 10,000 10,000
Pension Increase (Civil+Defence) 122,000
Total 821,000 1,014,000 23.51%

Amount in Rs Million

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Posted on: 2024-06-14T12:26:36+05:00