The provincial government has amended the Khyber Pakhtunkhwa Civil Servants Act of 1973 to reform the pension system, implementing a new scheme that has been formally notified. This new pension system applies to all employees hired after June 2022 but has not yet been implemented for the civil bureaucracy. Now, it has also been extended to new officers joining the provincial bureaucracy, making Khyber Pakhtunkhwa the first province to eliminate traditional government employee pensions.
Under the new scheme, the old monthly pension system has been abolished. Employees recruited after June 2022 will no longer receive a monthly pension but will instead be paid a lump sum upon retirement. A separate bank account will be established to manage these funds, ensuring that the exchequer is not burdened at the time of payment.
The new pension system, named the contributory pension system, involves monthly deductions from employees’ salaries based on their pay scale, with the provincial government matching these contributions.
According to sources in the provincial finance department, a special pension bank account will be opened to disburse pension payments. The previous pension system had become a significant financial burden on the treasury due to the large number of employees, impacting development projects.
How will the contributory pension system work?
The Khyber Pakhtunkhwa Finance Department states that new employees will receive their pension as a lump sum at the end of their service. Monthly contributions to the pension fund will be based on the employee’s basic pay scale, with matching contributions from the government. The funds in the pension account will accrue interest, which will be paid to the employees, thereby not straining the exchequer.
According to the provincial finance department, the federal government is also considering adopting a similar pension system, which would create a uniform pension system across the country.
Benefits of the new system
Finance Department sources indicate that although monthly pensions will be discontinued, the lump sum payment at retirement will be more substantial. Additionally, the new system will provide employees with interest-free loan facilities to help them undertake projects, such as building a house, before retirement.
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Provident funds?
It’s mean our leader can not give service to the old person
Leader did not know the difficulties of people’s after retirement
They can not develop the nation this policy of pension is not good
Wt Abt non government employees they don’t get pensions but still living it’s gud decision ,every one must be treated equally ,
Leader did not know after death of family member how their family live with difficulty Allass