Govt Introduces Contributory Pension Fund Scheme

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The federal government has launched a new Contributory Pension Fund Scheme for all civil employees of the federal government, including civilians paid from Defence Estimates, who are appointed on a regular basis on or after July 1, 2024. This new initiative marks a significant shift in the way pensions are managed for government employees.

In an office memorandum issued on Tuesday, the Finance Division confirmed that this scheme would also extend to the Armed Forces personnel who are appointed on a regular basis on or after July 1, 2025. The scheme aims to provide a more sustainable pension system for future employees.

Under the new scheme, contributions will be made as follows:

  • Employee Contribution: 10 percent of Basic Pay.
  • Federal Government Contribution: 20 percent of the employee's Basic Pay.

The Finance Ministry also highlighted that these contribution rates are provisional and subject to change based on future assessments and economic conditions.

It's important to note that the Economic Coordination Committee (ECC) of the Cabinet had already given principle approval for the establishment of a Pension Fund back in June. This new scheme is a part of the government's broader efforts to ensure long-term financial security for its employees.

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