Mandatory 20% Salary Deduction for Pension & Provident Fund in Karachi’s Local Councils–Notification Issued

Sindh Government Directs Karachi Local Councils to Establish Pension & Provident Funds:

The Local Government Department of Sindh has issued an important directive for all municipal corporations and union committees in Karachi regarding the establishment of pension, provident, and benevolent funds. This notification, received from the Sindh Government’s Local Government and Housing Town Planning Department, instructs local councils to deposit 20% of their total income, along with salary deductions, into dedicated accounts to ensure employee financial security.

Mandatory Employee Welfare Funds Include:

Provident Fund – A long-term savings plan for employees.
Pension Fund – Ensures financial stability after retirement.
Benevolent Fund – Provides financial assistance during emergencies.

Local government authorities, including Municipal Commissioners and Secretaries of Union Committees, must open these accounts within three days and report compliance to the Regional Directorate, Local Government Karachi.

This step aims to provide social security and financial protection for government employees, ensuring retirement benefits and emergency assistance when needed.

REGIONAL DIRECTORATE
LOCAL GOVERNMENT DEPARTMENT
KARACHI DIVISION

No.RDLG-2(16)/2024
Karachi, dated the 18^th March, 2025

To

The Municipal Commissioners,
Town Municipal Corporations (All) Karachi.

The Secretaries,
Union Committees (All) Karachi,
Through Additional/Deputy/Assistant Director,
Local Government (concerned).

Notification

SUBJECT:             ESTABLISHMENT OF PENSION FUND, PROVIDENT FUND ANDSOCIAL INSURANCE.

In pursuance to Government letter No.SO-V(LG)/1-78/2019 dated 18^th March, 2025 received from the Section Officer-V, Local Government and Housing Town Planning Department, Government of Sindh you are requested to establish following separate accounts and maintain the same by depositing 20% of all income as well as contributions/deductions from salaries of the employees of the Councils :-

1. Provident Fund.
2. Pension Fund.
3. Benevolent Fund.

Compliance thereof may be furnished within 03 days positively, as directed by the Government vide their letter referred above.

REGIONAL DIRECTOR
LOCAL GOVERNMENT KARACHI

Ensuring Financial Stability for Local Government Employees:

The establishment of Pension, Provident, and Benevolent Funds is a major step towards improving financial security for local government employees in Karachi. By making regular contributions to these funds, employees can secure their future and receive necessary financial aid in times of need.

It is essential for all municipal corporations and union committees to strictly adhere to the Sindh Government’s directive and complete the required formalities within the given deadline. Failure to comply may lead to strict administrative action.

Stay updated about Latest Government Notifications! Join our WhatsApp channel “Vocal Government Employees” for instant government notifications, policy updates, and important news tailored for public sector employees. Stay informed, stay ahead! Join now.