The Federal Government pension increase 2015 marked a pivotal shift in Pakistan’s pension policy. On 7th July 2015, the Finance Division (Regulations Wing) issued Office Memorandum No. F.4(1)-Reg.6/2015-1444, sanctioning a 7.5% increase in net pension for all civil pensioners, armed forces retirees, and civilian staff from defence estimates.
Table of Contents
Complete Reference:
- Office Memorandum No.: F.4(1)-Reg.6/2015-1444
- Date of Issue: 7th July, 2015
- Issuing Authority: Finance Division (Regulations Wing), Government of Pakistan
- Effective Date: 1st July, 2015
Factual Background
Prior to 2015, federal pensioners received multiple ad-hoc relief increases. Notably, a 20% increase was granted on 2nd July 2012 (O.M. No. F.4(1)-Reg.6/2012-1144). However, the government decided to restructure these benefits.
Core Legal Question
Would the 20% pension increase continue for those retiring on or after 1st July 2015? And how would the new 7.5% increase interact with prior relief measures?
Findings of the Authority (Finance Division)
The President of Pakistan sanctioned the following:
- 7.5% increase on net pension (excluding Medical Allowance) from 1st July 2015 until further orders.
- Discontinuation of the 20% increase (from 2012) for retirees on or after 1st July 2015.
- Continuation of previous 15% (2010), 15% (2011), 10% (2013), and 10% (2014) increases for new retirees.
Key Definition: “Net Pension” = Pension being drawn minus Medical Allowance.
Core Legal Concepts Upheld
- Non-retroactive application: Future retirees cannot claim discontinued benefits.
- Proportionate sharing: If gross pension is shared with another government (per Accounts Code, Vol-I, Part-IV), the increase is apportioned proportionally.
- Exclusions: No increase on Special Additional Pension (in lieu of orderly/driver allowance).
- Overseas applicability: Civil pensioners residing abroad (except India/Bangladesh) who retired after 15.08.1947 and receive no British pension increase are eligible.
Final Judgement / Decision
The Finance Division ordered immediate implementation. Family pensions under the Pension-cum-Gratuity Scheme 1954, Liberalized Pension Rules 1977, Extraordinary Pension Rules, and Compassionate Allowance (CSR-353) are also entitled to the 7.5% increase.
Summary Table: Key Decision Highlights
| Aspect | Before 1st July 2015 | Effective 1st July 2015 |
|---|---|---|
| 20% increase (2012 O.M.) | Applicable to all | Discontinued for new retirees |
| 15% (2010) + 15% (2011) + 10% (2013) + 10% (2014) | Applicable | Retained for new retirees |
| New 7.5% increase | Not applicable | Applicable to all (old & new) |
| Medical Allowance | Included in gross pension | Excluded from “net pension” |
| Family pension | Eligible for prior increases | Eligible for 7.5% increase |
Importance for Employees
For current pensioners, this meant an immediate 7.5% boost in monthly income. For future retirees (after 1st July 2015), the loss of the 20% increase was partially offset by retaining four earlier increases (15%+15%+10%+10%) plus the new 7.5%.
Practical Implications for Service Law
- Employers must recompute net pension before applying percentage increases.
- Medical Allowance is deductible for calculation purposes.
- Discontinuation of previous increases must be clearly communicated at retirement.
- Overseas pensioners must provide proof of non-receipt of British pension increases.
Conclusion
The Federal Government pension increase 2015 represents a balanced approach: rewarding existing pensioners while restructuring future liabilities. Service law practitioners must carefully distinguish between “discontinued” (20%) and “retained” (15%, 15%, 10%, 10%) increases when advising clients who retired exactly on or after 1st July 2015.