Further Delay Expected in Applying Contributory Pension Scheme to Armed Forces; Exemption Proposed in Upcoming Budget

Islamabad: The implementation of the Contributory Pension Scheme (CPS) for armed forces personnel is likely to face further delays, as the federal government considers exempting military employees from the scheme in the upcoming fiscal year 2025-26 budget.
According to sources, the Ministry of Finance has proposed exempting the armed forces from the scheme, which was introduced last year for new civil servants. However, the final decision on this proposal will be made in consultation with the International Monetary Fund (IMF).
An IMF delegation is expected to visit Pakistan next month, during which discussions on this matter are anticipated. Initially, the scheme was to be applied to new armed forces recruits starting July 1, 2025, but the implementation mechanism and structure for military personnel have not yet been finalized. This lack of preparation is expected to cause delays in enforcement for another year.
Sources confirm that the IMF has not made it a condition to immediately include armed forces in the CPS. Under the scheme, 10% of a government employee’s basic salary is to be contributed by the employee, while the federal government would contribute an additional 20% to the pension fund.
The delay reflects ongoing structural challenges and the sensitive nature of extending fiscal reforms to military institutions.