Government introduces new pension fund scheme

The federal government has rolled out a new Contributory Pension Fund Scheme for employees appointed on or after July 1, 2024.

This scheme, as notified by the Finance Division, applies to all civil employees, including civilians paid through Defence Estimates, who begin their regular service from this date onwards.

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The decision follows the Cabinet’s approval, aimed at modernizing pension provisions for future federal government employees. The new Contributory Pension Fund Scheme will also extend to the Armed Forces personnel who are appointed on a regular basis starting July 1, 2025.

Under the new Contributory Pension Fund Scheme, employees will contribute 10% of their basic pay, while the federal government will contribute 20% of the employees’ basic pay. These contribution rates are provisional and may be adjusted in the future.