Pay and Pension Commission 2021 and 2022

The government of the Pakistan Finance Division constituted Pay and Pension Commission 2021 and 2022 on 12th November 2021. This notification was issued to strengthen of pay and pension commission, 2020. The Prime Minister has been pleased to strengthen the Pay & Pension Commission notified vide Notification No.F.1(1)Imp/2020-498, dated 13-11-2020. The composition and TORs of the Pay & Pension Commission have been revised as follows.

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Latest News Pay and Pension increase 2022

In the financial year 2022-23, the salaries of employees of all of civil and military employees are likely to increase by up to 20%. Prime Minister Imran Khan and Federal Minister for Finance Shaukat Fayyaz Ahmad Tareen have agreed to increase in pay and pension about 20% of the monthly salary to civil and military employees, officers and employees. There has been a consultation on additions. According to sources, a proposal to increase the pensions of federal and civil pensioners by about 20% is also under consideration. Sources also said that during the new financial year house rent allowance will also be increased.

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Dr. Ishrat Hussain will advise the Commission. Pay &Pension Commission shall submit its recommendations within three months.

The scope of work of the Commission will include federal and provincial civil servants, other government servants, civilians paid from defence estimates, all Armed Forces/Civil Armed Forces personnel and holders of the posts in Management Scales and employees of such public sector corporations/autonomous/semi-autonomous bodies, other than banks and DFIs, which have adopted the scheme of Basic Pay Scales, Employees of Public Sector Corporations/Autonomous/Semi-Autonomous bodies who are regulated under the pay scales prescribed by these organizations and the employees governed under the Industrial Relations Ordinance, 1969 and whose financial terms of service are settled through collective bargaining agents, are excluded from the scope of work of the Pay & Pension Commission.

Terms of Reference of the commission are as follows:

Terms of Reference of the commission are as follows:

• Study the adequacy of existing Basic Pay Scale System and to evaluate the current salaries of Government employees throughout the federation including the provincial government and recommend measures for its improvement and uniformity. Also make recommendations for the streamining of existing classification from BPS 1-22.
• Study the separation of existing Basic Pay Scales for specialized departments/occupations/cadres.
• Review of Special Scales such as Management Grades, Management Position Scales (MP Scales), Special Professional Pay Scales (SPPS). Project Pay Scales etc. and propose measures for uniformity and improvement.
• Review of admissible regular allowances, special incentives and all other allowances with a view to highlight prevalent distortions and recommend corrective measures.
• Review of existing perks and facilties and make recommendations, including possibility of their monetization.
• To align the compensation of the government employees, both the federal and provincial, with the market over a period of time. This includes the salary and monetization of the compensation. In this regard, to propose a system of incorporating pay for performance concept as the basis for future increases.
• To propose measures as to how to merge the present allowances and ad-hoc allowances into the pay scales.
• To propose measures to bring uniformity in the present salaries being drawn by different divisions of the government in consonance with the professional expertise of the employees.
• To research international best practices of how civil servants are remunerated and how pensions are paid, especially with regards to the countries that are in the region and similar to Pakistan but better performers.
• Highlight existing distortions and anomalies in the pension scheme and recommend remedial measures. Verify the sustainability of the current model after critically evaluating future liabilities through an actuarial study.
• Evaluate alternate systems of pension like defined contribution and setting up of pension funds in light of international best practices and recommend a system with clear timelines that is more efficient and sustainable, considering the available resources.
• To review the existing incentive regime (honorarium and special rewards) and recommend improvement in it.
• To evaluate and recommend legislative measures to protect and streamline pay, pension and allowances regime for government employees.
• The Commission may, if so desired by the Government, make interim recommendations to provide interim relief, pending the submission of its final report.
• The Commission shall have power to co-opt any person or agency to assist it in its deliberations.
• While formulating its proposal/recommendations on the above terms of reference, the pay and pension commission would take into consideration the financial resources of the Government.
• The Finance Division shall provide secretariat support to the Commission