Finance Ministry Implements New Contributory Pension Fund Scheme
Islamabad: The **Ministry of Finance** has officially implemented a **new Contributory Pension Fund Scheme**, issuing a notification to enforce the system.
Under the new scheme, **federal employees will contribute 10% of their salaries** toward the pension fund, while the **government will contribute 12%**, making a total contribution of **22%** to the pension pool.
The new pension system applies to **employees recruited on or after July 1, 2024**, while **existing government employees** will continue under the old pension system. For **armed forces personnel**, the scheme will take effect from **July 1, 2025**.
The government has allocated **Rs 10 billion** for the new pension fund’s initial setup. According to official data, **pension liabilities have reached Rs 10.55 trillion**, and **armed forces’ pension expenses** are projected to rise to **Rs 742 billion** in the **2025–26 fiscal year**.
As per the Finance Ministry, employees **will not be allowed to withdraw funds before retirement**, although they will be permitted to **withdraw up to 25% of their accumulated amount upon retirement**.
The ministry also announced that a **non-banking finance company (NBFC)** will be established to manage the pension fund. The new contributory system has been **introduced with technical guidance from the World Bank and other international financial institutions**, aimed at ensuring **long-term fiscal sustainability** and **reducing the government’s pension burden**.
