Khyber Pakhtunkhwa government has implemented a new scheme to reform the pension system after amending the Civil Servant Act 1973 whereby the monthly pension system has been abolished by issuing an official notification of the scheme. has been given.
The new pension system is applicable to all employees hired after June 2022, but it is yet to be implemented for the civil bureaucracy. Now, the program has been extended to new officers joining the provincial bureaucracy. has been done, making Khyber Pakhtunkhwa the first province to abolish the traditional pension of government employees.
Under this new scheme, the old monthly pension system has been abolished. Employees recruited after June 2022 will no longer receive monthly pension but will be paid a lump sum after retirement. A separate bank account will be set up to manage these funds, to ensure that the payment is made on time. Time should not be a burden on the treasury.
This new pension system is called “contributory pension system”, in which monthly deductions are made from the salaries of the employees based on their pay scale, the provincial government will make an equal contribution to it. Sources say that a special pension bank account will be opened for payment of pension. Due to the large number of employees, the erstwhile pension system became a significant financial burden on the exchequer which affected development projects.
The Khyber Pakhtunkhwa Finance Department says that the new employees will get their pension as a lump sum at the end of their service. The monthly contribution to the pension fund will be on the scale of basic pay of the employees, with a matching contribution from the government. The money in the pension account will accumulate interest, which will be paid to the employees, thus not putting any pressure on the exchequer.
According to the provincial finance department, the federal government is also considering adopting a similar pension system, which will establish a uniform pension system across the country. Finance department sources say that although the monthly pension will be stopped, the retirement But lump sum payment will be more important. Additionally, the new system will provide interest-free loan facilities to employees to help them start projects like building a house before retirement.
