The federal government has announced a new pension scheme for government employees, effective from July 1, 2024. Under the new plan, employees will contribute 10% of their basic salary towards their pension. This move is part of the government’s efforts to reform the pension system for civil servants.
Key Highlights of the New Pension Scheme
- Monthly Deduction: Federal employees hired after July 1, 2024, will have 10% of their basic salary deducted each month for pension purposes.
- Government Contribution: The government will contribute 20% of the employee’s basic salary towards their pension. This combined amount will accumulate throughout the employee’s service period.
- Retirement Benefits: Upon retirement, the accumulated amount, consisting of both employee and government contributions, will be provided to the employee as their pension.
Previous Employees Unaffected
Government employees hired before July 1, 2024, will not be affected by this new scheme. They will continue to receive their pensions under the old system, with no deductions from their salaries.
Economic Coordination Committee Approval
The Economic Coordination Committee (ECC) approved these changes based on recommendations from the Pay and Pension Commission. The Ministry of Finance has also issued a formal notification regarding the implementation of this new pension scheme.
This new pension scheme aims to balance the pension system and ensure that government employees have sufficient financial support after retirement.
