A government job in Pakistan, for decades, came with one silent promise: a pension for life, a fixed one. That promise is currently being changed right now. The federal government has started to introduce a new pension scheme for public sector workers. It is very different from the system most families are used to.
What’s the New Federal Employees Pension Scheme?
This is the Defined Contribution Pension Fund Scheme 2024, which is now in its active phase. The government would not pay the employee a flat monthly pension from the national budget after retirement; instead, the employee and government would contribute money to a personal retirement account each month while the employee was still working. This account grows over the career. Whatever is saved becomes the retirement fund.
This is not like the old pension scheme where pensions were paid out of annual government expenditure which increased Pakistan’s pension bill year after year and strained the national budget.
Why Government Is Doing This
Pakistan’s pension costs have ballooned in recent years and officials say the old pay-as-you-go model is no longer financially sustainable. Under the new retirement plan, all the federal ministries, divisions and departments have been asked to prepare lists of employees and send updated records to the Accountant General of Pakistan Revenues. Each department must also appoint a senior officer, grade 17 or above, to manage the rollout on the ground.
To whom does this apply?
•Civil employees hired on or after July 1, 2024.
•Armed forces personnel appointed from a later date, determined separately.
•New recruits, not today’s pensioners.
Those who joined before this date and are already receiving a pension will stay on the old rules. They remain as they are.
What it means for families, employees
•Now part of the monthly salary is put into a personal pension account, with a contribution from the government.
•The money in the retirement savings is not taken from the annual budget but is managed by the approved fund managers.
•There is no set formula on how much you will have to retire on; it is based on how much you save and how the fund performs over the years.
•Employees are asked to keep their department current on their service record to prevent any delays.
For many families used to a guaranteed amount from a pension, this means a little more attention to retirement planning, just like private sector workers already plan around EOBI and personal savings.
Conclusion
The new pension scheme is one of the most significant changes to government employment in Pakistan in recent times. It moves the burden of retirement savings from the government alone to a shared model between the employee and the government. For federal employees who are just starting out, understanding how this contributory system works today will mean a lot more at retirement age tomorrow.
