The federal government has moved to operationalise its new Defined Contribution Pension Fund Scheme, directing ministries, divisions and departments to complete employee data and administrative arrangements for implementation.
The move marks a major shift away from Pakistan’s traditional defined-benefit pension model and is aimed at containing the rapidly rising pension burden on the national exchequer.
The Ministry of Finance had notified the Federal Government Defined Contribution Pension Fund Scheme Rules, 2024 through SRO 1728(I)/2025 on August 27, 2025, and formally circulated the rules to federal ministries and institutions for necessary implementation in October 2025.
Under the latest implementation instructions, ministries and divisions have been directed to prepare lists of employees covered by the scheme and update their records with the Accountant General Pakistan Revenues (AGPR) within 15 days.
Each ministry and division will also appoint an officer of Grade 17 or above as a focal person to supervise implementation and coordinate pension-fund-related matters.
The Human Resources Wing of the Ministry of Finance will oversee the implementation process, while the Controller General of Accounts will coordinate with AGPR to compile comprehensive employee records. The data will be arranged according to ministry, division, department and grade to facilitate the transition.
How the New Pension System Works
The new framework introduces a contributory model under which both employees and the government contribute toward an individual pension fund.
For civilian federal employees covered by the scheme, the employee contribution is set at 10% of pensionable pay, while the government contributes 12%. This brings the combined monthly contribution to 22% of pensionable pay.
