Pakistan Government Announces Voluntary Pension Scheme
The Pakistani federal government, acting upon a requirement set by the International Monetary Fund (IMF), is ready to roll out a new Voluntary Pension Scheme commencing from the 1st of July, according to our trusted source.
New Pension Scheme To Replace Existing System
Devised by the Securities Exchange Commission of Pakistan (SECP), this innovative scheme has been established with the intention of supplanting the existing pension scheme for government employees. From the commencement of the next fiscal year, the enrollment of all government hires will be within this voluntary scheme. Meanwhile, the present employees will receive their pensions from the state budget unless they choose to change it to the new scheme.
Encouraging Implementation in Private Sector
Moreover, the SECP is fervently promoting the adoption of this scheme throughout the private sector as well. It is being mooted as a better alternative to the prevalent Provident Fund or Gratuity systems, enabling regular income flow for staff after retirement.
Growth and Adoption of Pension Funds in Pakistan
Pakistan currently oversees 43 operational pension funds, which have accrued investments exceeding 61 billion rupees. The Khyber Pakhtunkhwa province pioneered the trend of investing in pension funds two years ago. The provincial government of Punjab is contemplating to employ this scheme as well with the goal of mitigating financial strains on the local budget.
Financial System Reform and Legislation
This initiative is just a small piece of the larger financial reform puzzle the government is working to put together in an effort to lessen the burden of pensions on the state budget. Concurrently, the appropriate legislation to make this scheme operative is anticipated to be integrated into the forthcoming finance bill.
- Pakistan Federal Government to introduce a Voluntary Pension Scheme starting July 1.
- Newly recruited government staff will be registered in the Voluntary Pension Scheme.
- SECP encourages implementation of the scheme in the private sector.
- Khyber Pakhtunkhwa was the first to invest in pension funds, with Punjab considering following suit.
- Legislation for the scheme is expected to be included in the finance bill.
