ISLAMABAD: To comply with another crucial requirement set by the International Monetary Fund (IMF), the government has opted to launch a new voluntary pension scheme, slated to commence on July 1st.
Government sources unveiled that the introduction of the voluntary pension scheme aims to lighten the burden of substantial government pensions and streamline the pension system. New hires in the government sector will now be enrolled under the voluntary pension scheme, departing from the traditional government pension setup.
A comprehensive strategy for new government recruits has been devised by the Securities and Exchange Commission of Pakistan (SECP), as per sources within the Ministry of Finance acquainted with the matter.
“New government employees will opt for the voluntary pension instead of the government scheme. Existing employees can also choose to migrate to the new scheme,” the sources added.
Unlike the existing Provident Fund or gratuity facilities prevalent in the private sector, the new pension scheme is tailored to provide a consistent, stable income to government employees upon retirement. The SECP has recommended extending the pension scheme’s implementation to both the public and private sectors to ensure employees’ financial security during retirement.
Media reports also revealed that the voluntary pension scheme will empower employees to retain their pension benefits even if they change jobs, ensuring ongoing financial support post-retirement. The SECP has proposed that the private sector exclusively adopt the voluntary pension scheme.
Presently, 43 pension funds are being established nationwide, with approximately Rs61 billion invested. Sources further indicated that the Khyber Pakhtunkhwa government embarked on investing in pension funds two years ago, establishing 21 pension funds catering to its employees.
Following this lead, the Punjab government is also on the brink of launching a voluntary pension scheme for its employees, indicating a broader adoption of pension reform initiatives across various provincial governments.
The decision to introduce the voluntary pension scheme aligns with the government’s endeavors to address the concerns raised by the IMF regarding inflated pension costs. By implementing this scheme, the government aims to promote fiscal sustainability and ensure long-term financial stability in the country.
