The Ministry of Finance and Defense is at odds over giving pay and pensions to armed officials in case of re-employment in the public sector.
Well-informed sources said that the Ministry of Defense has recommended that there should be no discrimination with armed forces personnel as compared to other federal government employees (retiring age of 60 years) as both pay and pension be made admissible till age of 60 years in case of re-employment in the public sector.
Whereas, the Pay and Pension Commission reportedly proposed that if re-employed both benefits will not be authorized by the federal government either pay or pension will be authorized during re-employment or the individual has to forgo either pay or pension.
The existing rule is that any individual re-employed in the public sector can get pay and pension both from the federal government. Sources said that the average retiring age of grade 20 officers is 50/52 years, grade 19 46/48, grade 18 42/44, and soldiers 38/40 years in the armed forces.
In addition, the defense ministry has also recommended that the pay and pension cases of families of martyrs and in-service death should also not be affected while the Ministry of Finance says that only one pension is entitled and an option should be available to select a higher one and surrender all others.
According to existing rules, the government authorizes multiple pensions to individuals in case of the death of a spouse/children and father if applicable. Sources said that the Ministry of Finance has also proposed that pension is now restricted to 3rd tier for only 10 years while exemptions should be given to Shuhada, families 20 x years, and disabled sons/daughters for life.
On the other hand, the Ministry of Defence has supported this point as the 10 years for ordinary family pension is feasible subject to no retrospective implementation. 20 years for special family pension subject to the enhancement of the rate of pension to 50% for 3rd tier with no upper limit and unmarried daughters be entitled to life or till marriage (being dependent on parents).
Ministry of Defence has also recommended a review of baseline pension every 3 years besides pension be increased by 100 percent of CPI with no upper limit. In addition, an increase in pension will be made on a sliding scale as practiced before 2010 to compensate old pensioners.
Whereas, the Ministry of Finance has proposed that an increase will be given on gross/net pension (authorized at the time of retirement net/gross as the case may be). In the future increase in pension has been indexed with CPI (80% of last 3 years) with a maximum 10% increase per annum.
On premature retirement, the Ministry of Finance proposed to discourage earlier retirement and a minimum 3% and maximum 10% penalty will be admissible to retiring individuals. On the other hand, the defense ministry has a point of view that this proposal does not affect the armed forces as the procedure is already built in.
Granting pension on last pay, the Ministry of Finance stated pension will be calculated on the average of the last 3 years’ pay whereas the Defense Ministry recommended continuing existing last-drawn average emoluments.
Sources said that the Ministry of Defense partially agrees with the commutation proposal as it has recommended that a double penalty should not be levied on pensioners as a 10% cut of commutation is already in place so no penalty on restoration, furthermore, 35% commutation equivalent may be offered to pensioners as soft loans from commercial banks on negotiated terms.
On the other hand, the Ministry of Finance proposed that the commutation/pension formula be changed to a ratio of 25% and 75% respectively (existing 35% & 65%) besides restoration of pension be discontinued in the future.