Introduction of New Pension System in Pakistan
ISLAMABAD: The federal government has decided to introduce a new contributory pension system for pensions and other benefits for government employees while issuing Euro bonds worth 1 billion.
The federal government has decided to abolish the existing system of pension and other benefits for newly recruited government employees and introduce a new contributory pension system while issuing Euro bonds worth 1 billion for which ten banks have received bids. Euro bonds will be issued by the end of December or in January after review.
According to responsible sources in the Ministry of Finance, the Pay and Pension Commission will prepare a report based on its recommendations before the next federal budget and submit it to the Ministry of Finance. Pension funds will be set up and deductions from employees’ salaries will be deposited in this fund.
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The pension will be paid by the fund instead of the government treasury, but the new system will not apply to existing government employees. The main purpose of this initiative is to control the expenditure on government pensions.