Govt introducing new pension scheme for employees from July 1st

ISLAMABAD: The federal government introducing the Voluntary Pension Scheme from July 1st to replace existing traditional pension setup on demand of the IMF, ARY News reported on Tuesday.

All newly recruited government employees will be awarded voluntary pension scheme from July 1st, while the old government employees will be given pension from official budget. The government could transfer the employees to new pension scheme with their consent.

The Securities Exchange Commission of Pakistan (SECP) has prepared the new pension scheme. The SECP has also suggested implementation of the new scheme in government as well as in private sector.

It said the private sector presently giving Provident Fund or Gratuity, instead it should only offer voluntary pension scheme to employees. SECP argued that the Provident Fund or Gratuity not providing regular income to employees on retirement.

Under this scheme the employees’ pension facility will be continued despite change in their service.

There are 43 pension funds currently running in the country and investment in these funds has reached to above 61 billion rupees.

Khyber Pakhtunkhwa was the first government that invested in pension funds two years ago and presently the KP government employees 21 pension funds have been working.

The Punjab government is considering introducing the Voluntary Pension Scheme to replace the existing traditional pension setup, aiming to reduce financial burden on the provincial budget and it has approached the SECP for support in implementation.

According to sources, the IMF has demanded of Pakistan to initiate voluntary pension scheme to reduce existing pension burden on budget.

The government will legislate for the voluntary pension scheme in the finance bill, sources at the Ministry of Finance said.