Implementation Of Defined Contribution Pension Fund Scheme-2024

The Ministry of Finance issued Office Memorandum No. 19(3)REG.6/2026-0001 dated 11 August 2026 to coordinate implementation of the Federal Government Defined Contribution Pension Fund Scheme, 2024. The memorandum says the scheme, introduced with effect from 1 July 2024, has entered its operational phase and directs ministries and divisions to nominate focal persons, designate offices for employee-data management, and verify and update the records of employees covered by the scheme.

Key Implementation Directions

• Each Ministry and Division is requested to nominate a focal person of BS-17 or above to coordinate scheme-related matters.
• The focal person’s name, BPS, designation, cell number, email address and office contact number are to be shared with Finance Division and CGA/AGPR.
• Each Ministry and Division is to designate an office or section responsible for verification, certification and maintenance of employee data required for implementation.
• Ministries and Divisions are to prepare and verify the list of employees appointed on a regular basis with effect from 1 July 2024 who fall within the scheme’s scope.
• The relevant particulars and credentials are to be updated with AGPR within 15 days of receipt of the Office Memorandum.
• The same actions are to be implemented by departments, subordinate offices and other entities under the administrative control of each Ministry or Division where their employees fall within the scheme.

What Ministries And Divisions Must Do

Paragraph 2 of the Office Memorandum requests Ministries and Divisions to take five coordinated steps:

1. Nominate a focal person: Select an officer in BS-17 or above to coordinate all matters relating to implementation of the Federal Government Defined Contribution Pension Fund Scheme. Share the officer’s name, BPS, designation, cell number, email address and office contact number with Finance Division and CGA/AGPR.
2. Designate a responsible office or section: Identify the office or section that will verify, certify and maintain the employee data required for the scheme.
3. Prepare and verify employee records: Identify employees appointed on a regular basis with effect from 1 July 2024 who fall within the scheme’s scope, and ensure their particulars and credentials are updated with AGPR within 15 days after receipt of the memorandum.
4. Extend implementation to subordinate entities: Ensure that the same actions are completed for departments, subordinate offices and other entities under the administrative control of the Ministry or Division whose employees are covered.
5. Finance Division HRM Wing: The HRM Wing of Finance Division is specifically requested to carry out the actions in points 1 to 3 for the departments, subordinate offices and other entities under Finance Division’s administrative control.

Role Of the Controller General Of Accounts

Paragraph 3 requests the Controller General of Accounts to coordinate with the Accountant General Pakistan Revenues (AGPR) and provide Finance Division with an updated consolidated list of employees registered under the Federal Government Defined Contribution Pension Fund Scheme. The consolidated list is to identify Ministries, Divisions, Departments and other relevant entities, with the employees arranged on a BPS-wise basis. The list is to be prepared after the relevant employee data has been verified by the respective Ministries, Divisions and Departments.

For a broader administrative reference on payroll, pension and DDO procedures, see the EmployeesDesk Handbook for Drawing and Disbursing Officers (DDO Code). It is a general financial-administration reference and does not replace the Defined Contribution Pension Fund Scheme Rules attached to this memorandum.

Who Is Covered Under the Defined Contribution Pension Fund Rules?

The attached Federal Government Defined Contribution Pension Fund Scheme Rules, 2024 define the employees covered by the scheme. The definition includes persons initially appointed on a regular basis in the specified Federal Government employment categories on or after the applicable commencement dates stated in the Rules:

• Federal Government civil servants, including civilians paid from Defence Estimates, appointed on or after 1 July 2024.
• Personnel of the Armed Forces appointed on or after the date specified by the Federal Government.
• Personnel of the Civil Armed Forces appointed on or after 1 July 2024.
• A contractual employee from the date of regular appointment, where that regular appointment falls on or after the applicable date mentioned in the Rules.

The Rules also contain exclusions. These include certain Federal Government employees appointed regularly before the relevant commencement dates who are subsequently appointed regularly against other Federal civil posts, and Judges of the Islamabad High Court and Supreme Court of Pakistan. The definition also states that covered categories remain employees for the scheme until reaching retirement age or leaving Federal Government service, whichever occurs earlier. The individual eligibility question should therefore be checked against the complete definition in Rule 2(g), not merely the general date mentioned in the implementation memorandum.

Contribution Rates Under the Attached Rules

The First Schedule, Part I, sets out the monthly contribution rates as a percentage of pensionable pay for Federal Government employees, including civilians paid out of Defence Estimates:

These figures are the rates printed in Part I of the First Schedule. Part II of the First Schedule, labelled for the Armed Forces of Pakistan, shows dashes rather than numerical contribution percentages in the copy of the Rules attached to this memorandum.

Employer Responsibilities Under the Scheme Rules

The attached Rules describe the employer’s role as being performed through the Accountant General, Finance Division and the Federal Government’s Ministries, Divisions, Departments and subordinate offices. The listed responsibilities include obtaining, recording and updating pension-account particulars; ensuring that salary is paid only after the relevant account particulars have been received and recorded or updated; deducting the employee’s contribution and collecting the employer’s contribution; and arranging payment of the overall contribution into the relevant Employer Pension Fund bank account for credit to the employee’s pension account.

The Rules also address contribution deductions on salary paid in arrears, salary-slip information about employee and employer contributions, and cooperation with the company involved in monitoring the scheme. Finance Division’s listed responsibilities include annual budget allocation for the employer contribution, agreements with eligible Pension Fund Managers, an insurance plan for death and disability risk cover, separate pension funds and sub-funds, and arrangements for the non-banking finance company role described in the Rules.

Employee Pension Account And Investment Choices

Under Rule 5, an employee is required to open a pension account with an eligible Pension Fund Manager upon appointment and inform the Accountant General through the proper channel. The employee is to determine an allocation policy subject to the maximum aggregate exposure limits in the Second Schedule. Where the employee does not select an allocation policy at the time the pension account is opened, the default policy in the Third Schedule applies.

The Second Schedule sets maximum aggregate exposure limits for the high-risk sub-funds as a percentage of the employee’s pension account balance. The table below reproduces the age bands and limits stated in that schedule:

The Third Schedule prescribes the following default asset allocation where an employee does not select an allocation policy when opening the pension account:

Withdrawal And Transfer Provisions In the Rules

The Rules state that an employee cannot withdraw money from the pension account before retirement is notified or ordered by the employer and the notification or order is received by the eligible Pension Fund Manager. Upon reaching retirement age, the employee may not withdraw more than 25% of the accumulated balance; the remaining amount is to be invested in the manner prescribed under the Voluntary Pension System Rules, 2005, for at least 20 years or until the employee’s death, whichever is earlier.

The Rules also provide for transfer of a pension account balance from one eligible Pension Fund Manager to another. They address transfer where an employee leaves employment for a reason other than retirement and state that, in cases such as resignation, termination, dismissal, removal or voluntary retirement from Federal Government employment, the employee’s entitlement to receive an amount from the pension account will be prescribed by the Federal Government from time to time.

Gazette Notification Enclosed With the Memorandum

The PDF includes the Federal Government Defined Contribution Pension Fund Scheme Rules, 2024, notified by the Finance Division through S.R.O. 1728(I)/2025 dated 27 August 2025 and published in the Extraordinary Gazette of Pakistan on 8 September 2025. The attached Rules are issued under section 42 of the Public Finance Management Act, 2019, read with section 32 of that Act. The Office Memorandum dated 11 August 2026 is an implementation communication referring Ministries and Divisions to those notified Rules.

Frequently Asked Questions

What is the purpose of the 11 August 2026 memorandum?

It coordinates the operational implementation of the Federal Government Defined Contribution Pension Fund Scheme, 2024, including focal-person nomination, employee-data verification and updates with AGPR.

Who should nominate a focal person?

Each Ministry and Division is requested to nominate a focal person in BS-17 or above and share the officer’s contact and designation details with Finance Division and CGA/AGPR.

What is the deadline for updating employee data with AGPR?

The memorandum says the particulars and credentials of employees falling within the scheme are to be updated with AGPR within 15 days of receipt of the Office Memorandum.

What are the contribution rates for Federal Government employees?

Part I of the First Schedule states an employee contribution of 10% and an employer contribution of 12% of pensionable pay, making an overall contribution rate of 22%.

Does the attached PDF include the Scheme Rules?

Yes. The PDF includes the Federal Government Defined Contribution Pension Fund Scheme Rules, 2024, as a Gazette-notified annex.

Official Finance Division Office Memorandum And Attached Rules

For the full implementation directions, employee eligibility definition, contribution schedules and operative Scheme Rules, consult the original 17-page document.

Download the Finance Division Office Memorandum dated 11 August 2026 with attached Scheme Rules (PDF)