In order to fulfil another important condition set by the International Monetary Fund (IMF), the government has decided to roll out a new voluntary pension scheme, slated to commence from July 1.
Sources within the government revealed that the introduction of the voluntary pension scheme aims to alleviate the burden of huge government pensions and streamline the pension system. Any new human resources will be hired under the voluntary pension scheme, transitioning from the traditional government pension setup.
A comprehensive strategy has been devised for new government recruits by the Securities and Exchange Commission of Pakistan (SECP), according to sources in the Ministry of Finance familiar with the matter.
"New government employees will get voluntary pension instead of the government scheme. If the existing employees also agree, they can be transferred to the new scheme," the sources added.
The new pension scheme is designed to provide a constant, steady income to government employees upon retirement, unlike the existing Provident Fund or gratuity facilities offered in the private sector. The SECP has proposed the implementation of the pension scheme in both the public and private sectors to ensure financial security for employees during their retirement years.
Sources also disclosed that the voluntary pension scheme will enable employees to maintain their pension benefits even in the event of a job change, ensuring continuous financial support post-retirement. The SECP has suggested the private sector only offer the voluntary pension scheme.
Currently, 43 pension funds are being set up across the country, with approximately Rs61 billion invested. Sources further said that the Khyber Pakhtunkhwa government took the initiative to invest in the pension funds two years ago, with 21 pension funds catering to its employees.
Following suit, the Punjab government is also poised to initiate a voluntary pension scheme for its employees, signalling a broader adoption of the pension reform initiative across various provincial governments.
The decision to introduce the voluntary pension scheme comes as part of the government's efforts to address the concerns raised by the IMF regarding inflated pension costs. By implementing this scheme, the government aims to foster fiscal sustainability and ensure long-term financial stability in the country.
