Government Ends One-Year Pension Policy: The Sindh government has officially ended the contributory pension scheme introduced last year and has brought back the old pension system for all newly hired provincial employees. This big change was confirmed by the Finance Department on 17 September 2025, giving workers their previous retirement benefits and gratuity back.
The Short-Lived Contributory Pension Scheme
In September 2024, the Sindh Cabinet, led by Chief Minister Murad Ali Shah, approved the Sindh Defined Contributory Pension Scheme (SDCPS). Under this plan:
| Item | Details |
|---|---|
| Employee Contribution | 10% of basic salary |
| Government Contribution | 12% matched monthly |
| Traditional Pension | Discontinued |
| Gratuity | Discontinued |
| Legal Basis | Amendments to Sindh Civil Servants Act 1973 |
The scheme faced heavy criticism. Employee unions said it put too much financial pressure on workers. Financial experts warned that it lacked sustainability and could fail to protect workers in the long term.
Policy Reversal – Old Pension Restored
On 17 September 2025, the Sindh Finance Department issued a fresh notification:
- The SDCPS has been terminated.
- The old pension and gratuity system has been reinstated.
- The earlier notification from 1 November 2024 has been revoked.
This decision means all employees hired after November 2024, who were under the contributory scheme, will now receive the same pension and benefits as older civil servants.
Why the Change?
Analysts highlight three main reasons for this sudden shift:
- Employee Protests: Unions and associations strongly opposed the contributory plan and demanded the old system.
- Administrative Burden: Managing monthly contributions and payouts was creating extra work and confusion.
- Political Considerations: Restoring the old benefits improves relations with government employees, a large voter group.
Concerns Moving Forward
While many workers are happy, experts are still cautious about the future:
| Concern | Details |
|---|---|
| Financial Strain | Returning to old pensions could increase long-term liabilities. |
| Policy Instability | Frequent reversals show weak long-term planning. |
| Trust Issues | Sudden changes can damage trust in government policies. |
These points suggest that, even though the decision is positive for employees, the government will need to manage costs and improve planning.
Conclusion
The end of the one-year pension policy is a major win for Sindh’s government employees. It restores secure retirement benefits and reassures workers about their future.
However, this move also exposes deeper problems with pension sustainability in Pakistan. Without comprehensive reforms, rising pension expenses could remain a heavy burden on provincial budgets. To maintain trust and stability, experts suggest the government should create a long-term pension strategy that protects both employees and the province’s financial health.
