The federal government is deliberating a proposal to reduce the retirement age of civil servants from 60 to 55 years. Prime Minister Shehbaz Sharif has been briefed on the matter but has yet to approve the recommendation.

 According to the sources, if implemented, the proposed reduction would exclusively apply to civil servants and could lead to the early retirement of several bureaucrats. However, the move is reportedly opposed by the bureaucracy.

In addition, the Ministry of Finance is evaluating adjustments to the Federal Secretariat Allowance, which has remained unchanged for over a decade. The ministry is also working on an International Monetary Fund (IMF) proposal to include all serving civil servants under the Contributory Pension Scheme, currently applicable only to new recruits.

Efforts to manage the rising pension burden include linking pension increases to inflation. The government allocated Rs. 1,014 billion for pensions this fiscal year and has already implemented a 15% pension increase. Future adjustments, based on inflation data from the State Bank of Pakistan, were initially recommended by the Pay and Pension Commission 2020.

Meanwhile, the Sindh government has approved the Sindh Defined Contributory Pension Scheme 2024. Under this scheme, civil servants appointed or regularized after the commencement of the Sindh Civil Servant (Amendment) Act, 2024, will no longer be eligible for traditional pension and gratuity. Instead, they will receive contributions made to a specified fund by both themselves and the government.