PESHAWAR: The KP government successfully transitioned from traditional defined-benefit pensions to a Voluntary Pension System (VPS) for its civil servants.

The new pension system has been launched for those employees who have joined the government service in the province from June 7, 2022. It is anticipated that around 33,000 civil servants of KP will join the new pension system.

To celebrate the successful transition of the new pension system, the Securities and Exchange Commission of Pakistan (SECP), in collaboration with the Mutual Funds Association of Pakistan (MUFAP), organised a conference on KP Pension Reforms: Leading the Way Forward in Peshawar, here on Wednesday.

The SECP Chairman Akif Saeed said that the launch of a new pension system is a significant step towards efficient management of the fiscal space, which has been greatly burdened by the growing public pension bill. He emphasised the need to expand the VPS framework’s scope to meet the retirement benefits needs of all the departments of the federal and provincial governments.

Akif appreciated the KP government for taking the leap and said that this initiative will provide a sense of relief to participants by offering a viable substitute for the government-defined pension regime while at the same time reducing governmental expenditures.

In his key note address, Secretary Finance KP, Amer Sultan Tareen, praised SECP’s role in the smooth implementation of pension reforms in the province. Tareen highlighted the significant increase in provincial pension expenditure over the past two decades, reaching 132 billion in fiscal year 2023-24, from 878 million in FY 2003-04.

This growth, Tareen said, from less than 1% of the total consolidated budget to over 12% in 2023-24, necessitated the launch of a funded, professionally managed contributory pension framework for the provincial government’s sustainability.

Copyright Business Recorder, 2023