The Ministry of Finance has issued a notification introducing new rules for pensioners, under which pension payments will now be made exclusively through the digital pension system.
According to the Finance Ministry, pensioners will be required to complete digital verification through the National Database and Registration Authority (NADRA) every six months. The verification can be completed through the NADRA Pak ID app or at authorised NADRA centres.
The ministry said the previous paper-based pension verification system has been completely abolished, while pension payments will be transferred directly to pensioners’ bank accounts.
Under the new rules, the previous schedule requiring pensioners to undergo verification in March and September has also been discontinued. Digital verification every six months will now be mandatory.
According to the document, banks will no longer require pensioners to provide biometric verification or life certificates, and pension accounts will not be marked dormant.
The Finance Ministry said pension accounts will not be closed, and pension payments will be transferred once the verification process is completed. However, pension payments will be suspended if the required verification is not completed for six months.
Earlier, Pakistan’s Ministry of Finance unveiled a new pension formula by moving ahead with the implementation of the Defined Contribution Pension Fund Scheme 2024 for newly recruited federal government employees.
As part of the reform, the federal government approved 16 pension fund managers to administer the new contributory pension system. According to an official notification, the approved fund managers have signed agreements with the government and are now authorised to manage and invest employees’ pension contributions.
Under the new formula, both the government and employees will contribute to individual pension accounts each month. Newly recruited federal employees will contribute 10% of their pensionable salary, while the federal government will contribute an additional 12%. Each employee will have a separate pension fund that will accumulate throughout their service.
Unlike the traditional pension system, the new model links retirement benefits to the total contributions made during an employee’s career and the returns generated through investments. The accumulated funds will be invested in approved financial instruments, with the pension amount at retirement depending on both the size of the fund and its investment performance.
Officials described the reform as a major milestone in Pakistan’s pension system, aimed at making retirement financing more sustainable. The contributory model is expected to reduce the government’s long-term pension liabilities by sharing responsibility between the state and employees while ensuring pension funds are managed professionally and transparently.