Pakistan launches new pension scheme for government employees
- By Web Desk -
- Oct 04, 2025

ISLAMABAD: The federal government has introduced a new pension scheme for both federal employees and the armed forces as the system already in place burdened the national exchequer.
The government has now made the scheme contributory to share the amount with an employee and the government.
Whereas the ministry of finance has issued notification of the new scheme.
The new scheme mandates a total contribution of 22% to the pension fund while employees will contribute 10 percent and remaining 12 percent by the government.
The government has allocated a sum of Rs10 billion for the new pension fund.
The new pension system will not apply to current government employees but will come into effect for employees recruited after July 1, 2024. For military personnel, the new pension scheme is expected to be enforced from July 1, 2025.
For benefit of the employees after retirement it is made an important feature of the scheme that the employees will not be able to withdraw funds from their pension accounts before retirement. However, retirees will be permitted to withdraw up to 25% of the accumulated funds at the time of retirement.
The Ministry of Finance also announced that a Non-Banking Financial Company (NBFC) will be established to manage the pension fund, in line with recommendations from international financial institutions such as the World Bank.
As of 2024, the pension obligations are expected to soar to Rs1 trillion Rs55 billion. For the armed forces, the pension expenditure is projected to reach Rs742 billion by 2025 while it has become a pressing issue in light of the growing pension liabilities.
