Govt taps 16 fund managers for pension reform

August 04, 2026 (MLN): The government has moved to operationalise the Defined Contribution Pension Fund Scheme (DCPFS) for public sector employees, signing formal agreements with 16 pension fund managers a year after the scheme's launch, as part of broader reforms aimed at curbing the mounting pension burden on the national budget.

The Ministry of Finance said in a circular that it had executed agreements with the eligible fund managers, most of them affiliated with banks and insurance companies.

Under the terms of the agreements, these fund managers will be responsible for setting up and running conventional as well as Shariah-compliant funds for government employees, operating within the framework of the federal government's defined contributory pension scheme and in line with the Voluntary Pension System Rules, 2005, according to media reports.

Only these approved managers will be permitted to launch and administer employer pension funds, with the government committing to annual budgetary allocations to meet its contribution obligations.

The agreements lay out standard conditions covering systems support, electronic transfer of contributions into designated pension fund accounts, and the subsequent allocation of units to each employee's relevant sub-fund as per policy.

A mandatory insurance component is also built into the arrangement, requiring the fund managers to arrange death and disability cover for enrolled employees.

While the pension fund managers will each maintain separate funds, overall implementation and monitoring will fall to a Non-Banking Finance Company (NBFC) still to be established by the government.

Until the NBFC becomes fully functional, the finance ministry will itself perform this role, including setting up an online portal to facilitate account openings, gather data from fund managers, and serve as the primary point of communication with them.

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