Benevolent Fund 2025: Federal Government Introduces Revised Rates for Employees & Retirees

Benevolent Fund

The federal government of Pakistan has approved a major revision in the Benevolent Fund policy for civil servants. This update redefines the monetary benefits retired government employees receive upon retirement, based on their grade at the time of retirement. The change was confirmed during a meeting of the National Assembly’s Cabinet Secretariat Standing Committee, chaired by a senior official.

These adjustments are intended to strengthen social security among retired civil servants, ensure better financial support, and respond to inflation and rising cost of living. The revised payments will also affect current employees by strengthening expectations for post-retirement benefits.

What Is the Benevolent Fund?

The Benevolent Fund is a government-operated social welfare program designed to provide a one-time lump sum payment to civil servants when they retire. It is meant to help retirees settle initial costs of post-service life—whether for healthcare, adjustment to lower income, or other expenses.

Prior to this revision, the payment amounts under this fund were lower and less differentiated by grade; the new policy introduces clearly defined payment slabs depending on the employee’s grade.

Revised Payment Structure

Here are the new rates under Benevolent Fund 2025 for federal employees and retirees:

Employee Grade at Retirement	New Lump Sum Payment
Grade 1 to 10	PKR 500,000
Grade 11 to 16	PKR 1,000,000
Grade 17 and above	PKR 1,500,000

These amounts are significantly higher than previous rates, providing more support especially to lower and middle grade retirees whose accumulated savings may be low.

Implementation & Timeline

The Standing Committee has tasked the Benevolent Fund authorities with conducting a financial impact assessment. This assessment will analyze how the revised rates will affect the fund’s budget, timelines for rollout, and department-wise disbursement capacity.
The committee has given a deadline of 90 days for completing this assessment and for issuing a timeline for implementation.
Once the timeline is set, payments will be made according to grade categories for retiring employees.

Why the Revision Matters

Financial Relief: Many civil servants retire with modest financial means; these revised lump sums provide critical immediate relief.
Equity Across Grades: By segmenting payments by grade, the policy aims to recognize length of service, responsibilities, and rank differences.
Address Inflation: Rising inflation and living costs make older rates inadequate; this change helps offset some of those pressures.
Boost Morale: Knowledge of better post-retirement benefits can improve morale and sense of security among current employees.
Transparency & Accountability: The 90-day assessment and timeline directive is meant to ensure the policy is implemented without undue delay or favoritism.

Relation With Other Benefits

Simultaneously, the government has approved a 7% pension hike for retired employees, effective from a date in mid-year, based on their net pension as of a specified reference date. This applies broadly, including for those from civil services, armed forces, and civil armed forces.
Salary increases for serving employees have also been proposed in parallel, covering the full range of grades.

These combined measures—Benevolent Fund revision and pension/salary hikes—are part of government efforts to provide relief to both retirees and currently serving staff amid economic pressures.

FAQs

Q1: Who is eligible for the revised Benevolent Fund payments?
A: All federal government employees retiring from service are eligible. The payment amount depends on their grade at retirement.

Q2: When will the new rates be paid out?
A: After the financial impact assessment is completed (within 90 days), a clear schedule will be issued and payments will follow accordingly.

Q3: Does the revised benefit replace any previous benefits?
A: No. It complements existing pension increases and other allowances. It is a separate lump sum under the Benevolent Fund.

Q4: What grades get how much?
A:

Grades 1–10: PKR 500,000
Grades 11–16: PKR 1,000,000
Grade 17 & above: PKR 1,500,000

Q5: Does this apply to federal retirees only, or provincial government employees too?
A: This specific policy is for federal government civil servants. Provincial governments may have separate Benevolent Fund policies.

Challenges & Considerations

Ensuring that the financial resources are available so that payments are made without delay.
Avoiding bureaucratic delays in assessment, verification, and disbursement.
Communicating clearly to employees and retirees exactly when and how they will receive the funds.
Maintaining sustainability of the Benevolent Fund while balancing the government’s budgetary constraints.

Conclusion

The Benevolent Fund 2025 revision is a welcome development for Pakistan’s civil servants and retired personnel. With significantly increased lump sum payments tied to job grade, it is an important step in recognizing years of service, easing the financial burden of retirement, and responding to economic challenges.

If executed well, this policy will not only support retirees but also foster greater trust and stability within the civil service. Moving forward, clear timelines, transparent implementation, and regular communication will be key to ensuring all eligible individuals benefit as promised.