ISLAMABAD: The federal government has officially implemented a new Contributory Pension Scheme for public sector employees, issuing a formal notification that lays out its framework and enforcement mechanism.
Under the new system, federal government employees will be required to contribute 10 percent of their basic salaries to their individual pension accounts, while the government will provide a 12 percent contribution, thereby establishing a joint funding model for future pension benefits.
According to the notification, employees will not be allowed to withdraw any amount from their pension accounts before retirement. However, upon retirement, employees will be permitted to withdraw up to 25 percent of the total accumulated funds, with the remaining amount to be used for the provision of regular monthly pension payments.
Importantly, this scheme will not apply to existing government employees, who will continue to receive pensions under the current structure. The new system will be applicable exclusively to employees recruited on or after July 1, 2024.
Officials have stated that the introduction of the contributory pension system aims to modernize the pension framework, ensure its long-term financial sustainability, and reduce the mounting fiscal burden on the national exchequer. The government believes that this reform will align Pakistan’s pension system with international best practices and promote greater fiscal discipline.
— ChitralToday