Bad News for Government Employees: Federal Government Lowers GP Fund Profit Rate for Fiscal Year 2025-26
ISLAMABAD: The federal government has announced an adjustment to the profit rate on the General Provident (GP) Fund for federal workers that will affect how much profit federal workers receive on their government benefits.
The Finance Division has issued an official notification that the rate of profit on accumulated balances and subscriber deposits in GP Fund for the 2025-26 financial year will be 12.05% per annum. Compared to the previous fiscal year 2024-25, when profit rate was at 12.46%, the current figures are slightly higher.
Areas of applicability and Specialized Departmental Guidelines
The new revised profit rate will be used on all of federal government employees’ GP Fund accounts.
The Ministry of Finance said two separate guidelines on profit rates on provident fund balances under the administrative control of the Ministry of Railways and Ministry of Defence will be issued by the ministries for the respective financial year.
Understanding the General Provident Fund
The General Provident Fund is a compulsory savings scheme maintained by the government for civil servants where a certain percentage of the employees’ monthly salary is deducted periodically.
The money is contributed on the government’s behalf for the benefit of the public servants and balances accumulate under the government’s stewardship with annual profit paid according to fiscal performance and government rate notifications.