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The Government of Pakistan has announced the introduction of a new Contributory Pension Fund Scheme for its employees, effective July 1, 2024. This scheme aims to reduce the burden of pension expenses on the government by introducing a contributory system, where employees and the government contribute to the fund.
Key Features of the Scheme
– The scheme will apply to all civil servants, including those receiving salaries from the defense budget.
– New employees will contribute 10% of their basic salary to the fund, while the government will contribute 20%.
– The scheme is designed to gradually bring pension expenses under control.
– Existing pensioners will also be subject to new rules under the scheme.
Background and Rationale
The Economic Coordination Committee (ECC) had approved amendments to the pension scheme based on the recommendations of the Pay and Pension Commission. The government aims to reduce its pension burden, which has become a significant expense. This new scheme is a step towards achieving this goal.
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Benefits of the Scheme
– Reduces pension burden on the government
– Encourages employees to contribute to their retirement benefits
– Provides a sustainable solution for pension expenses