A notification regarding the General Provident Fund (GP Fund) for government employees in Punjab has been issued.
According to the notification, a profit rate of 12.05 per cent will be applied to the GP Fund balances of regular government employees in Punjab.
The GP Fund is deducted from government employees’ salaries every month and accumulated over time.
Employees who had a GP Fund balance as of June 30, 2026, will receive a 12.05 per cent profit on that amount. The profit will be credited in August, resulting in an increase in the GP Fund amount reflected in employees’ August salary slips.
It is worth mentioning that the federal government has reduced the profit rate on the General Provident Fund.
Following the reduction, the markup rate for the 2025-26 financial year has been set at 12.05 per cent, effective from July 1, 2025.
According to the notification, the GP Fund markup rate for the 2024-25 financial year was 12.46 per cent, which has now been reduced to 12.05 per cent.
Earlier, the Punjab government approved a 3.5% increase in the net pension of civil pensioners who retired before July 1, 2026. According to the notification, the increase will apply only to the net pension and will not include the medical allowance.
The Finance Department clarified that employees retiring on or after July 1, 2026, will not be eligible for the 3.5% pension increase, as their pensions will be determined under the new rules and the revised pay scales.
The notification further states that the pension increase will also apply to family pensions and other eligible pension categories in accordance with the prescribed rules and regulations. Accountant General offices, district accounts offices, treasuries, and relevant departments have been instructed to implement the revised payments from July 2026 onward.
Financial experts say the implementation of the new pay scales will raise the basic salaries of government employees, leading to improved pensions, gratuity, and other service benefits in the future. However, the move is also expected to significantly increase the Punjab government’s annual expenditure on salaries and pensions.
Various associations representing government employees have welcomed the decision, describing the introduction of the new pay scales as a positive step for public sector workers.
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