New Pension Scheme Introduced for Federal Government Employees.
A Contributory Pension Fund Scheme has been introduced for new government employees.
According to the Ministry of Finance’s notification, the scheme will take effect from July 1, 2024. The Contributory Pension Fund Scheme will apply to civil employees, while civilian employees drawing salaries from the defense budget will be covered by the scheme starting from July 1, 2025.
Under the Contributory Scheme, newly recruited employees will contribute 10% of their basic salary, while the federal government will contribute 20% to the Contributory Pension Fund Scheme.
Previously, the Economic Coordination Committee (ECC) had approved amendments to the pension scheme based on the recommendations of the Pay and Pension Commission. The ECC recommended implementing these amendments starting from July 1, 2024. In the meeting, it was decided that a Contributory Pension Scheme would be introduced for new employees from July 1, and new rules would also be introduced for existing pensioners.
It is noteworthy that the Federal Minister for Finance, Muhammad Aurangzeb, had stated during a press conference that pensions are a significant burden, and over time, we need to make changes to the service structure so that the pension costs gradually come under control.
