According to the Federal Employees Benevolent Fund and Group Insurance Act, 1969 [Act II of 1969] if a federal government employee dies while in service, his family is paid group insurance money. But any federal government employee from whose monthly salary deduction of group insurance premia is made at source during his whole service tenure till retirement does not get even a single penny of Group Insurance money at the time of retirement. This is because the aforesaid law does not provide for payment of group insurance money to a federal employee at the time of retirement in spite of making payment of the group insurance premia from his monthly salary during his long service spell of 25 to 35 years and even more in several cases; he deserves such payment like any insured person who gets the insurance amount on maturity of insurance policy.
It may not be out of place to mention that the provincial governments of Balochistan and Khyber Pakhtunkhwa have been paying the group insurance money to their employees since 2009 and 2014 vide their Act No. 10 of 2009 and No. XXVIII of 2014, respectively. The Punjab and Sindh governments employees have also demanded similar scheme and are actively pursuing their case. It has been argued by the protesting employees that normally insurance companies pay substantial amount to the policyholders after the maturity of policy which is normally 10 to 20 years period; therefore it is not fair to deprive the government servants of this facility. Moreover, the deducted amount of group insurance is paid to State Life Insurance which has to pay the amount on retirement or superannuation age and there will be no financial burden on the government.
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