The Sindh government has announced its decision to amend the Civil Service Act of 1973, aiming to phase out the provision of monthly pensions for government employees recruited after July 2024. Instead, a new scheme—the Sindh Defined Contributory Pension Scheme 2024—will be introduced to ease the financial burden of pensions on the provincial budget. Under the proposed amendment, new employees will no longer be eligible for monthly pensions upon retirement.
Instead, they, along with the provincial government, will contribute to the Sindh Employee Benefit Scheme. Upon retirement, these employees will receive a Golden Cheque Gratuity, a lump-sum payment based on the contributions. The new scheme proposes a contribution rate of 12% from the government and 10% from the employees. This shift in policy is seen as a necessary step to relieve the growing pressure on the province’s budget, which currently allocates a substantial amount toward pensions, according to the Sindh government.
The Sindh cabinet approved this policy shift during a recent meeting at the Chief Minister’s House, setting the scheme’s implementation date for July 1, 2024. The cabinet also endorsed a new subsection to be added to the Sindh Civil Servant Act of 1973, formalizing the transition to the new system. As per the amendment, civil servants hired or regularized on or after the enactment of the Sindh Civil Servant (Amendment) Act, 2024 will participate in the new Defined Contribution Pension Scheme. Instead of receiving a pension and gratuity, they will be entitled to the accumulated contributions made by both themselves and the government during their service period. This change marks a significant departure from the traditional pension model, reflecting the government’s efforts to balance public finances while ensuring future retirees receive adequate retirement benefits.
