New Scheme to Offer Steady Income to Govt Employees Post-Retirement, Unlike Provident Fund or Gratuity
To meet an important condition set by the International Monetary Fund (IMF). The government will launch a new voluntary pension scheme starting July 1.
Government sources reveal that this scheme aims to ease the burden of huge government pensions and streamline the pension system. New hires will be enrolled in the voluntary pension scheme, moving away from the traditional government pension setup.
According to the Ministry of Finance references. The Securities and Exchange Commission of Pakistan (SECP) created a comprehensive strategy for new government recruits.
“New government employees will receive a voluntary pension instead of the traditional government pension. Existing employees can also switch to the new scheme if they agree,” the sources added.
This new pension scheme will provide a consistent, steady income to government employees upon retirement. Unlike the current Provident Fund or gratuity offered in the private sector. The SECP has proposed implementing the pension scheme in both the public and private sectors to ensure financial security for retirees.
Sources also disclosed that the voluntary pension scheme will allow employees to maintain their pension benefits even if they change jobs, ensuring continuous financial support post-retirement. The SECP has recommended that the private sector offer only the voluntary pension scheme.
Currently, 43 pension funds are being set up nationwide, with around Rs61 billion invested. Sources further mentioned that the Khyber Pakhtunkhwa government invested in pension funds two years ago, establishing 21 employee funds.
The Punjab government is also set to launch a voluntary pension scheme for its employees, indicating broader adoption of pension reform across various provincial governments.
The decision to introduce the voluntary pension scheme is part of the government’s efforts to address IMF concerns about inflated pension costs. By implementing this scheme, the government aims to foster fiscal sustainability and ensure long-term financial stability in the country.
