Finance Minister Muhammad Aurangzeb has supported increasing the retirement age from 60 to 62 years. He said this move could help reduce the country’s growing pension liabilities. Speaking in a Senate Finance Committee meeting, he shared concerns about rising unfunded pensions. He noted that pension reforms had already started, including the introduction of a Defined Contributory Pension system for civilians last year.
During the meeting, Senator Farooq H. Naek suggested raising the retirement age to 62, comparing it to extensions given in the judiciary. Senator Anusha Rahman also backed the proposal and said the age could go up to 65 or even 70. Aurangzeb agreed with them and shared his experience from the banking sector, where he had helped raise the retirement age to 65 successfully.
Even though the idea received support, officials from the Finance Ministry raised concerns. They explained that the civilian retirement age increase may not cut costs much. This is because most of the pension burden comes from early military retirements. In fact, the military’s pension budget has grown to Rs. 510 billion for 2025–26, up from Rs. 463 billion last year.
Meanwhile, Senator Faisal Vawda criticized the National Finance Commission (NFC) arrangement. He suggested that the condition of showing an income tax certificate for property purchases should be removed. He also proposed giving equal incentives to both buyers and sellers and asked for the removal of section 7E in the next budget.
Lastly, Aurangzeb confirmed a major change in tax collection. Starting July 1, 2025, provinces will begin collecting agricultural income tax. He assured senators that the government is committed to enforcing this collection despite past failures. The overall debate reflects strong efforts to fix the pension crisis and rebalance the national budget.