Pakistan advances pension reform with new funds approved for Balochistan

The Securities and Exchange Commission of Pakistan has approved seven pension funds for the Government of Balochistan, marking the practical rollout of the Defined Contribution pension model in the province.

The move is part of a broader government strategy to transition from the traditional Defined Benefit pension system to a more sustainable and transparent Defined Contribution framework.

Punjab and Khyber Pakhtunkhwa have already implemented contributory pension programs, while the federal government and Sindh are in the process of operationalizing their pension fund structures.

Notably, the federal government and all provincial administrations in Pakistan have introduced the necessary legal frameworks to support this transition.

Shift to contributory system

The SECP is playing a central enabling role in shifting Pakistan from the traditional Defined Benefit system to a modern Defined Contribution pension framework. The new system is expected to help reduce the government’s long-term pension liabilities, gradually move obligations off the budget, and improve fiscal sustainability.

The seven pension funds approved for Balochistan fall under the Balochistan Contributory Pension Scheme Rules, 2025.

The approved funds will be managed by leading, SECP-licensed and A-rated pension fund managers, including Atlas Asset Management Limited, ABL Asset Management Limited, Pak Qatar Family Takaful Limited, Faysal Asset Management Limited, and Al Meezan Investment Management Limited. The SECP has also approved the offering documents for these funds.

More approvals in pipeline

In addition, applications for approval of 17 more pension funds are currently under process with pension fund managers.

Under the Defined Contribution model, pension benefits are based on contributions made by both employees and employers into individual accounts.

The system ensures transparency and gives employees greater control over their retirement savings. The funds are professionally managed, and retirement benefits depend on total contributions and investment returns.

The SECP has been closely working with federal and provincial governments to ensure the smooth and effective implementation of pension reforms across Pakistan.