There are no free lunches, cut the pensions of military officers and the current generation of military personall will have been jibbed out of their rightful income but in terms of new recruits, the best people will avoid the military. High pensions and lower salaries are good because it ensures that people serve for reasonable periods and dont jump out so often (reduces turnover) this is important becasue turnover dramatically increases training costs. In fact Henry Ford used this famously in paying his workers above market rates which actually increased profit of his business.
The problem with the Pakistani military is not the wages/salaries/pensions (total compensation) they receive but the fact that half a million armed personall for a nation of 150 million poor people is too high. Reducing salary now to cut costs will destroy morale and increase turnover and prevent Pak. military from attracting good recruits. However the size of the military can be reduced without sackings but by reducing number of recruits by around 7,000 a year which will minimise short term structural adjustment costs and reduce total salary bill of military. Any other proposed solution is misguided. You could halve the salaries of generals and in the short term you will have bitter generals who are paid less, in the long run you will get happy monkeys occupying the top job because the other bright people who would work towards becoming a general are now running their own companies or have migrated.
Theres another very important reason why Generals are paid a phenomenal amount. Its the same reason CEO's are paid much more than vice CEO's even though the gap in marginal output is not 2 or 3 times more (even if salary of CEO is 3 times more). The reason is when performance is difficult to measure, having a tournament with a (large) prize for the winner ensures everyone competing puts in maximum effort. Becoming a general is a prize, of the half a million personall maybe a few hundred will attain the top jobs (with massive increase in salary and perks and status). Therefore all peronall put in maximum effort to reach that position (not quite true but close enough in reality in tournaments because of payoff equilisation, the rational strategy is to be indifferent between competing and not competing. Therefore in reality of the half a million personal not all will put in maximum effort. A large number will put in minimum effort and a small number will put in maximum effort. This is because everyone putting in maximum effort cant be an equilibrium. There are after all no free lunches in life.) But the greatness of this tournament system is becaue it plays on peoples vanity, everyone overestimates their own capability and therefore more people put in maximum effort than is optimal from their sense. Therefore a tournament system for high positions actually gets more effort for given amount of resources spent than trying to pay everyone their marginal product.