Pakistan, Oct. 4 -- The federal government has officially launched a major pension reform, replacing the old pension system for new recruits with a contributory pension scheme. Under the new rules, federal employees hired on or after July 1, 2024, must contribute 10% of their basic salary, while the government will contribute 12%. This change brings the total contribution to 22%, aligning with global financial recommendations-particularly from the World Bank.

The Finance Ministry has issued the Federal Government Defined Contribution Pension Fund Scheme Rules, 2024, under the Public Finance Management Act, 2019. These new rules replace the August 2024 order that initially set the government's share at 20%. The system will be regulated un...