The federal government has officially notified the Federal Government Defined Contribution Pension Fund Scheme Rules, 2024, marking a shift from the traditional non-contributory pension system to a contributory model for federal employees.
The notification, issued as SRO 1728(I)/2025 on August 27, 2025, has been circulated to all key federal ministries, divisions, and institutions for implementation, according to an Office Memorandum from the Ministry of Finance.
Under the new scheme, the employer’s monthly contribution for civilian federal employees will be 12% of pensionable pay, while the employee will contribute 10%. The contributory framework for the armed forces has not yet been implemented, with both employer and employee contributions remaining at zero.
Officials stated that the reform aims to enhance the sustainability of Pakistan’s pension system, reduce fiscal pressures, and align it with international best practices. Contributions from both employees and the government will be invested in a dedicated fund, with returns determining pension benefits.
The move is considered a major structural reform in Pakistan’s public financial management, addressing rising pension liabilities that have become increasingly unsustainable.
The notification has been shared with the Auditor General of Pakistan, Accountant General Pakistan Revenues (AGPR), the State Bank of Pakistan, and major ministries, including Defence, Education, Railways, Energy, IT, and Climate Change, for immediate compliance.
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