The General Provident Fund Rules for Federal Services set out the framework for eligibility, subscriptions, nominations, individual accounts, annual interest, advances and final payment of General Provident Fund (GPF) balances for covered Federal Government employees. The supplied booklet is the Finance Division’s Updated Edition 2017, dated 12 December 2017. It brings together the Federal Services rules, related Government decisions and schedules, separate provident fund rules for Class IV servants, and the Provident Funds Act, 1925.
General Provident Fund Rules: Edition, Authority and Scope
The booklet is issued by the Finance Division, Government of Pakistan. Its Preface explains that the previous published edition was dated 14 February 1983 and that the 2017 edition was prepared to incorporate later instructions, including the compulsory nature of GPF contributions and the discontinuation of payment of life-insurance premiums from GPF accumulations. It also adds the Provident Funds Act, 1925 and the separate General Provident Fund provisions relating to Government employees in BPS 1–4 for ease of reference.
The main text is headed General Provident Fund (Central Services) Rules in several places, while the booklet’s footnotes explain that the word “Central” was substituted with “Federal” by a Ministry of Law notification dated 1 August 1975. The rules are therefore presented in the 2017 booklet as the General Provident Fund rules for Federal services.
Rule 4 describes the eligible class of Government servants whose conditions of service the President is competent to determine, including permanent, temporary and officiating service, subject to the stated exclusion for employees who are required or permitted to subscribe to a Contributory Provident Fund while they retain that right. Rule 6 then distinguishes between compulsory and optional subscribers. The rules should not be assumed to apply automatically to every provincial employee, autonomous body, contractual appointment or employee covered by a different contributory fund. Check the service terms, adoption orders and current departmental instructions for the particular employee.
Eligibility and Compulsory Subscription
Rules 4 and 6 must be read together. Rule 4 sets out the broad eligibility conditions for joining the Fund. Rule 6 provides that the following eligible Government servants are compulsory subscribers:
- Employees in permanent pensionable service;
- Employees in permanent non-pensionable service; and
- Temporary or officiating employees who have completed two years of continuous temporary and/or officiating service.
Other eligible Government servants may elect to join as optional subscribers. The booklet also reproduces Government decisions on certain re-employed and other categories. For example, it states that a Government servant re-employed after retirement for a period exceeding two years should be treated as a compulsory subscriber. The exact position for a particular appointment should be checked against the employee’s service terms and the relevant instructions.
Rule 7 allows an optional subscriber to discontinue contributions, subject to the rule’s limits. The right to renew subscription may lapse if the subscriber discontinues more than three times, except during leave. Discontinuing contributions does not itself create a right to withdraw the balance; final withdrawal is governed by the events specified in Rules 29 to 31.
Constitution of the Fund and Subscriber Accounts
Rule 3 provides that the Fund is maintained in Pakistan in rupees. Rule 9 requires an individual account to be prepared in the name of each subscriber. That account records the subscriber’s contributions and the interest credited under Rule 14.
The account is therefore the central record of the employee’s GPF balance. Subscribers should retain account statements and pay records and should reconcile monthly deductions with the credits shown by the relevant Accounts Office. The booklet’s procedure rules require an annual account statement and provide a period for reporting errors, described below.
Nomination: Who Receives the Balance on Death
Rule 8 requires a subscriber to send a nomination to the Account Officer as soon as possible after joining the Fund. The nomination identifies the person or persons entitled to receive the amount standing to the subscriber’s credit if the subscriber dies before payment, or after the amount has become payable but before it is paid.
If the subscriber has a family when making the nomination, the nomination must be in favour of member or members of that family. Where more than one nominee is named, the subscriber must specify a share for each nominee so that the entire possible balance is covered. The forms in the First Schedule provide different nomination formats depending on whether the subscriber has a family and whether one or several persons are nominated.
A nomination may be cancelled by written notice to the Account Officer, but a fresh nomination must be sent with the cancellation. The Second Schedule contains contingent notices of cancellation for specified events, such as a nominee predeceasing the subscriber or a change in family circumstances. A valid nomination or cancellation takes effect when it is received by the Account Officer. The booklet also advises that a copy of the nomination may be kept in the service book of a non-gazetted employee or the personal file of a gazetted officer.
Monthly Contributions and Changes in Subscription
Rule 10 provides for monthly subscription to the Fund, except during a period of suspension. A subscriber may elect not to subscribe during leave, but the election must be intimated in the manner prescribed. An officer who draws their own pay bill indicates the election by making no GPF deduction in the first pay bill after proceeding on leave. Other subscribers must communicate the election in writing to the head of office before proceeding on leave. Failure to give timely notice is treated as an election to continue subscribing, and the option once intimated is final for that period.
Rule 11 states that the amount of subscription is fixed by Government from time to time. Where the subscription rate changes because of promotion or reversion, the change takes effect from the following 1 June. The booklet does not prescribe one universal monthly contribution percentage or rupee amount for every employee. It is therefore important not to treat an old rate appearing in a historic instruction as the current subscription rate.
Rule 12 provides that a subscriber transferred to foreign service or sent on deputation outside Pakistan remains subject to the Fund rules in the same manner as if the subscriber had not been transferred or sent on deputation.
Recovery and Realization of Subscriptions
Rule 13 sets out how contributions and recoveries are realized. Where emoluments are drawn from a Government treasury in Pakistan, subscriptions and recovery of advances are generally deducted from those emoluments. Special arrangements apply to employees on foreign service outside Pakistan. Where emoluments are drawn from another source, the subscriber is required to forward monthly dues to the Account Officer.
If a Government servant fails to subscribe from the date on which subscription became compulsory, arrears with interest may become payable. The Account Officer may direct recovery from the employee’s emoluments in installments or otherwise, under the authority and conditions described in the rule.
Interest on GPF Balances
Rule 14 provides that Government credits interest to a subscriber’s account at the rate determined for each year. The booklet does not set one permanent percentage that can be used for all years. The applicable annual rate is fixed by Government, and the calculation is made under the rule’s prescribed method.
The rule describes how interest is calculated on the opening balance, amounts withdrawn during the year and amounts deposited during the year. It also specifies when a deposit is treated as received for interest purposes, how amounts are rounded, and how interest is dealt with when the balance becomes payable. If final payment is delayed for administrative reasons such as missing credits or transfer of an account between audit offices, the printed note provides for interest on the affected accumulations up to the end of the month preceding payment.
Rule 14(5) and the related Government decisions address the option of a subscriber not to receive interest. The booklet records instructions on changing that option and on the treatment of periods when interest was foregone, including possible adjustments where interest-free Government advances had been obtained. Because the rules and decisions refer to specific circumstances, subscribers should confirm the current procedure with their Account Officer rather than assuming that an option change applies retrospectively.
For a final withdrawal, the booklet also explains that interest for a year should not be calculated and paid before Government has actually intimated the rate for that year. Any residual amount may be paid later when the rate is notified. For ongoing accounts, the interest is credited when the rate for the year is announced.
Temporary Advances from the Fund
Rule 15 allows a temporary advance from the subscriber’s GPF balance at the discretion of the appropriate sanctioning authority specified in the Sixth Schedule. The authority must be satisfied that the subscriber’s financial circumstances justify the advance and that the amount will be used for an authorized purpose listed in the rule. These include:
- Expenses connected with prolonged illness of the subscriber, the subscriber’s spouse, or a person actually dependent on the subscriber;
- Overseas passage for health or education of the subscriber or a person actually dependent on the subscriber;
- Obligatory expenses, appropriate to the subscriber’s status, for funerals or religious ceremonies, and specified marriage-related expenses; and
- Specified vehicle purchases in the circumstances set out in the rule for subscribers whose deposits carry no interest and who do not take a Government advance for the same purpose.
The sanctioning authority must record reasons for granting an advance. Under Rule 15(1)(c), the normal ceiling is three months’ pay or half of the subscriber’s GPF balance, whichever is less, unless special reasons justify an exception. A second advance may be allowed only in rare and exceptional cases, by the authority next above the original sanctioning authority, with reasons recorded. The outstanding balance of the first advance, including interest if any, is recovered from the second advance so that only one advance remains outstanding at a time.
House-Building and Age-Based Non-Refundable Advances
Rule 15-A addresses an advance for construction of a house in Pakistan for the subscriber’s occupation, and for specified reconstruction, extension or renovation of a house already owned by the subscriber or eligible family members. The printed ceiling is 36 months’ pay or 80% of the subscriber’s GPF balance, whichever is less. The rule also contains conditions concerning the mortgage of the property, registration of the mortgage deed and recovery of the advance from pay.
Rule 15-B, inserted through the 1990 amendment, provides for specified non-refundable advances at age-related stages. It describes three advances, one each after attaining ages 45, 50 and 55, with different permitted purposes and conditions. The rule and its later clarifications address construction, reconstruction or renovation of a house, purchase of agricultural land or a residence, and repayment of a loan from a financial institution. It also sets conditions concerning use of the money, evidence of expenditure, sale or alienation of property and the maximum amount of each advance.
The booklet reproduces a 2001 clarification stating that a subscriber who has attained 50 years may draw a non-refundable advance up to the full account balance in the circumstances described, including a case where an earlier 80% advance had been taken and the balance 20% remained. These age-based provisions are detailed and must be read with the full Rule 15-B, its amendments and the employee’s applicable service instructions. They should not be interpreted as an unrestricted cash-withdrawal facility for every subscriber.
Recovery and Adjustment of Advances
Rule 16 provides for recovery of a refundable advance in equal monthly installments. The normal number of installments is not less than twelve, unless the subscriber elects otherwise, and the rule sets an upper limit of forty-eight installments. A subscriber may choose to pay more than one installment in a month. Recovery normally begins on the first occasion after the advance when the subscriber draws pay, or foreign-service remuneration, for a full month.
The rule allows recovery to be postponed by the President or an authorized authority on the subscriber’s written request. It also restricts recovery while the subscriber is on leave or receiving a subsistence grant, except with the subscriber’s consent. Where more than one advance exists, each is treated separately for recovery. The rule separately explains how interest on a refundable advance is recovered after the principal has been repaid.
Rule 28 provides that where an advance or other amount withdrawn from the Fund is used for a purpose other than the one for which it was sanctioned, the amount with interest may become immediately repayable and may be recovered from the subscriber’s emoluments under the rule.
Insurance and Family Pension Provisions: Important Historical Qualification
The contents page groups Rules 17 to 28 under payments towards insurance policies and family pension funds. However, the Preface to the 2017 edition expressly states that payment of life-insurance premiums from GPF accumulations had been discontinued. The booklet’s footnote records that payment of insurance premiums from GPF ceased from 20 December 1987. Rule 27-A further provides that no life-insurance policy shall be financed from a subscriber’s GPF account, while policies already being financed were allowed to continue until finalization.
Accordingly, Rules 17 to 27 should not be presented as a current facility for starting new life-insurance premium payments from GPF. They remain printed in the compilation for the treatment of historical arrangements and related cases. Subscribers should rely on the Preface, Rule 27-A and the relevant Finance Division instructions when interpreting this portion of the booklet.
Final Withdrawal of GPF Accumulations
When Leaving Government Service — Rule 29
Rule 29 provides that the amount standing to a subscriber’s credit becomes payable when the subscriber quits service, subject to the rule’s proviso for a subscriber who is dismissed and later reinstated. A Government decision reproduced under this rule states that the Accounts Officer should arrange payment within three months of the date on which the balance becomes payable.
Retirement and Leave Preparatory to Retirement — Rule 30
Rule 30 allows the balance to become payable on application when a subscriber proceeds on leave preparatory to retirement, or when the subscriber is permitted to retire while on leave or is declared medically unfit for further service by a competent medical authority. A reproduced Government decision also gives an employee who continues working to superannuation without availing LPR the option to draw the final GPF payment during the twelve months preceding the superannuation date. The conditions in the rule and the relevant decision should be checked before making an application.
Payment on Death of a Subscriber — Rule 31
Rule 31 governs payment where a subscriber dies before the GPF amount has become payable, or after it has become payable but before actual payment. Where a valid nomination in favour of a member or members of the subscriber’s family subsists, the amount covered by that nomination is payable to the nominees in the proportions stated. Where there is no qualifying family nomination, or it covers only part of the balance, the remaining amount is dealt with under the family distribution provisions in Rule 31. The rule also addresses cases where the subscriber leaves no family and a valid nomination is in place.
Payment Procedure and Claims — Rule 32
Rule 32 places the duty of payment on the Account Officer in accordance with Section 4 of the Provident Funds Act, 1925. A person claiming payment must make a written application to the Account Officer within the period stated in the rule. The rule also says that payment is made in Pakistan and that an undisputed portion of a balance may be authorized promptly while a disputed or uncertain portion is resolved. The schedules include application forms for final withdrawal by a retiring or retired employee and by the legal heirs of a deceased employee.
Transfer to Pensionable Service
Rules 33 and 33-A cover the transfer of provident fund balances where a Government servant moves between specified provident fund arrangements and pensionable service. In the cases described, subscriptions and accrued interest may be transferred with the consent of the other Government or fund authority. Where the former fund is contributory, the treatment of Government contributions and the recognition of qualifying service for pension are addressed separately. Rule 33-A addresses transfer of a subscriber’s contributions and interest to the Contributory Provident Fund (Pakistan) if the subscriber is subsequently admitted to that fund.
The booklet also reproduces a 2006 Finance Division clarification concerning transfer of GPF balances when Government employees move to autonomous bodies and payment of balances when employees leave Government service. The employee’s transfer order, the receiving body’s rules and the applicable Accounts Office instructions should be checked for the individual case.
Annual Statements, Corrections and Account Numbers
Rules 34 to 36 set out the administrative procedure for maintaining the Fund. Rule 35 requires a subscriber to quote the GPF account number, supplied by the Account Officer, when paying subscriptions by deduction or in cash. The Account Officer must communicate any change in the account number.
Under Rule 36, the Account Officer sends an annual statement showing the opening balance as at 1 July, credits and debits during the year, interest credited as at 30 June, and the closing balance. The statement also asks whether the subscriber wishes to change a nomination or has acquired a family where no family nomination was previously recorded. Subscribers are expected to check the statement and report errors to the Account Officer within six months of receiving it. A subscriber may also request the total balance at the end of the latest month for which the account has been written up, but not more than once in a year under the rule.
Schedules, Forms and Separate Class IV Rules
The 2017 booklet contains schedules and appendices in addition to the main Federal Services rules. The schedules include nomination forms, contingent notices of cancellation, policy assignment forms, authorities and procedures for advances, and prescribed applications for final withdrawal. The final-withdrawal forms include one for a retiring or retired Government servant and another for the legal heirs of a deceased subscriber.
The booklet separately includes the Federal Government (Class IV Servants) Provident Fund Rules, made under S.R.O. 812(K)/66 and effective from 1 July 1966. These rules set out a distinct system for deductions, records in the service book, reconciliation by the head of office, interest calculation and payment to Class IV servants or their nominees. The preface says that related rules for Government employees in BPS 1–4 were included for reference. These separate provisions should not be merged with the main subscriber rules when determining an employee’s entitlement.
The Provident Funds Act, 1925 is also reproduced in the booklet. It contains the statutory framework concerning payment of provident fund balances, rights of nominees and related protections. The schedules and Act should be read with the relevant GPF rule rather than as stand-alone instructions for every employment category.
Important Note on the 2017 Edition and Current Instructions
This article explains the Finance Division’s Updated Edition 2017 and the provisions printed in that compilation. The booklet itself includes instructions and amendments made over several decades. It does not establish that every historic amount, procedure or administrative instruction remains unchanged today. In particular, the annual subscription amount and interest rate are determined by Government from time to time; the booklet does not provide one permanent current rate. The life-insurance premium provisions are expressly subject to the discontinuation and Rule 27-A qualification noted above.
Before applying for a subscription change, advance, transfer or final payment, confirm the latest Finance Division orders, the employee’s service category and the procedure of the relevant Accounts Office. For a related explanation of financial administration and drawing-officer responsibilities, see the EmployeesDesk DDO Code Handbook. The complete General Provident Fund Rules PDF is available for reference.