New Pension Scheme in Pakistan: Big Changes for Govt Employees
On July 1, 2024, the Contributory Pension Fund Scheme officially came into effect, marking a major shift in how government pensions are managed.
Contributory Pension Fund Scheme
The Contributory Pension Scheme applies to two key groups:
- New Civilian Hires: All civilian employees joining the federal government after July 1, 2024 will fall under this scheme.
- Military Personnel: Military personnel recruited in the upcoming fiscal year will also be included.
Existing government employees, both civilian and military, will not be affected by this new scheme. It primarily targets future generations of government workers.
Sharing the Responsibility: New Pension Scheme in Pakistan
The Contributory Pension Scheme introduces a shared responsibility approach:
- Employee Contribution: Employees will contribute 10% of their basic salary towards the pension fund.
- Government Contribution: The federal government will contribute a matching 20%, demonstrating their commitment to this initiative.
This shift from the previous non-contributory system, where the government solely funded pensions.
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