The Khyber Pakhtunkhwa (KP) government has announced a restored pension scheme by amending the Civil Servant Act of 1973, unstable from a monthly pension payout to a tumor amount retirement payment.
This new system, known as the “Contributory Pension System,” involves deductions from employees’ salaries founded on their pay scale, with the provincial government matching these contributions.
A steadfast bank account will be set up to manage these funds, confirming the payments do not strain the treasury when disbursed. This system, which changes the monthly pension system, has been officially notified and applies to all employees hired after June 2022, though it has yet to be executed for the civil administration.
The KP Finance Department simplified that new employees will receive a lump-sum pension upon finishing their service. The pension fund will be built from monthly contributions taken from employees’ basic salaries, with equal contributions from the government. These funds will earn interest, certifying the system remains financially workable without troubling the treasury.
Additionally, the Finance Department mentioned that the federal government is as adopting a similar pension system to create a uniform approach nationwide.
According to details, while the monthly pension system is being phased out, the lump-sum payments at retirement will be more extensive. The new scheme also includes provisions for interest-free loans to help employees undertake projects like building a house before retirement.
The program’s expansion now embraces new officers joining the provincial bureaucracy, making KP the first province to remove the traditional pension system for government workers.
