No.TM/Contributory Pension/2024-25/
12-December-2024
Office Of The Accountant General Sindh
Sindh Contribution Pension Scheme: Employee and Government Deduction Mechanism:
The implementation of the Sindh Contribution Pension Scheme marks a pivotal step in reforming the retirement benefit system for employees recruited by the Government of Sindh from July 1, 2024, onwards. As outlined by the Finance Department of Sindh, this scheme introduces a contributory mechanism where both employees and the government contribute towards a Defined Pension Contribution Scheme. With this forward-looking initiative, the focus shifts towards a sustainable and transparent pension system, ensuring long-term financial security for employees while maintaining fiscal discipline. The mechanism requires a seamless integration into the SAP system, involving detailed procedural changes such as new General Ledger (GL) heads, wage types, and reporting functionalities. This request aims to ensure the effective and timely operationalization of the scheme, fostering a robust framework for pension contributions and their subsequent management. Notification Describes;
OFFICE OF THE
ACCOUNTANT GENERAL SINDH
Audit & Accounts Complex, University Road, Near
NIPA Chowrangi, Gulshan-e-Iqbal, Karachi
No.TM/Contributory Pension/2024-25/
12-December-2024
To,
The Controller General of Accounts,
Islamabad.
Subject :- REQUEST TO DEVISE EMPLOYEE AND GOVT, DEDUCTION MECHANISM IN SINDH CONTRIBUTION PENSION SCHEME
It is submitted that the Finance Department, Government of Sindh vide its letter No. FI/SR-111/3-2356/2024 dated: 21st November, 2024 has forwarded mechanism of deduction from employees’ and Government’s contribution towards “Sindh Contribution Pension Scheme” and its recording in SAP system for the employees hired w.e.f. 01st July 2024.
The salient features of the mechanism are summarized below:
a) 10% of the basic pay will be deducted from the employee’s salary.
b) 12% of the basic pay will be contributed by the Government of Singh to the Defined Pension Contribution Scheme.
c) The Government of Sindh will allocate budget under (the newly created) Gl. Head A041-Retirement Benefits which will be included in the employee’s monthly gross salary (as Non-Taxable head). Simultaneously, the same amount will be deducted and then credited to the GL. Head created for the above scheme on posting of the payroll.
d) New Gl. heads will be created for recording of Contributions made by employees and the Government of Sindh respectively.
e) Similarly, new GL head for budgeted amount pertaining to Government’s contribution under the major head A041-Retirement Benefit (Debit) shall be introduced in Chart of Accounts.
f) Morcover, on HR side, new wage types for the above mentioned newly created GL Heads shall also be required as under:
– Wage type for Regular Payroll
– Wage type for off-cycle Payroll
– Wage type for Supplementary Payroll
g) The contributions, i.e. 10% deductions from the employee’s salary and 12% contribution by the Govt. of Sindh, appearing in the Pay slip of the employee will be automatically credited in the employee’s pension contribution account in the same manner as the GP Fund subscriptions are credited to subscribers/employees account.
h) A report, similar to GP Fund slip, shall also be required to be developed in SAP by the FABS Directorate to provide employee specific information on a monthly and annual basis regarding the contributions received.
i) Both the contributions, i.e., 10% deductions from the employee’s salary and 12% contribution by the Govt. of Sindh, credited under the newly created Gl. Heads mentioned above will be paid to the Fund Managers by the A.G Sindh on 5t of every month through Pre-Audit Cheque along with details of subscribers each month.
Keeping in view the above facts, it is requested that a dedicated team from the FABS Directorate may be assigned to develop Sindh specific functionality in the SAP system to implement the newly introduced Sindh Contribution Pension Scheme for the permanent employees recruited w.e.f. 01st July, 2024.
Enclosure: Sindh Contribution Pension Scheme Mechanism
ACCOUNTANT GENERAL SINDH
Conclusion:
The successful implementation of the Sindh Contribution Pension Scheme depends on the collaborative efforts of the FABS Directorate, Accountant General Sindh, and other relevant stakeholders. By introducing a robust deduction and contribution mechanism, supported by SAP system integration, the scheme ensures transparency, accuracy, and ease of management for all stakeholders. Timely development of Sindh-specific functionalities in the SAP system is crucial to address the operational requirements, including payroll adjustments, new GL heads, and comprehensive reporting structures. This initiative not only strengthens the financial security of government employees but also enhances the accountability and efficiency of pension fund management. It is imperative that the requested resources and expertise be promptly allocated to realize the successful execution of this transformative pension scheme.
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