Pakistan Shifts Pensions to Private DC Funds as Costs Swallow Up to 87% of PSDP
Updated
Updated · The Express Tribune · Aug 4
Pakistan Shifts Pensions to Private DC Funds as Costs Swallow Up to 87% of PSDP
3 articles · Updated · The Express Tribune · Aug 4
Summary
Pakistan is moving future public-sector retirees into privately managed defined-contribution pension funds as its legacy pay-as-you-go system strains state finances.
Pension spending has been rising about 25% annually and has absorbed roughly 78%-87% of the Public Sector Development Programme, squeezing money for schools, hospitals and infrastructure.
SECP cleared the shift by amending Voluntary Pension System rules in March 2024, allowing public and private employers to offer fully funded DC plans run by asset managers.
By April 2026, provincial implementation had accelerated: Punjab approved 25 dedicated funds and Balochistan 15, with managers including JS Investments, Alfalah Asset Management, NBP Funds and UBL Fund Managers.
The model would cap the state's liability at fixed contributions, make pensions portable for workers and could become a template for a broader federal overhaul.