In a significant move, the federal government is set to roll out the Voluntary Pension Scheme starting July 1st, replacing the traditional pension system. Newly hired government workers will automatically enroll in the new scheme, while existing employees will continue with the old pension plan funded from the official budget. However, they can switch to the voluntary scheme with their consent.
Crafted by the Securities Exchange Commission of Pakistan (SECP), the scheme aims to provide regular income to retirees, unlike the current Provident Fund or Gratuity options. SECP suggests extending this scheme not only to the government sector but also to the private sector.
Currently, 43 pension funds operate in the country with a total investment surpassing 61 billion rupees. Khyber Pakhtunkhwa took the lead in investing in pension funds two years ago, with 21 funds benefitting government employees. The Punjab government is contemplating adopting the Voluntary Pension Scheme to alleviate the financial strain on its budget, seeking support from SECP.
Sources reveal that the International Monetary Fund (IMF) recommended Pakistan to implement the voluntary pension scheme to alleviate the existing pension burden on the budget. The legislative framework for this scheme is expected to be included in the upcoming finance bill, as disclosed by sources from the Ministry of Finance.
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