ISLAMABAD: The federal government has slashed the profit rate on General Provident Fund (GPF) subscriptions and balances by 41 basis points to 12.05 percent for the financial year 2025-26, reducing returns for government employees on their retirement savings.

The Finance Division, in a resolution, said the revised rate would be applicable to subscriptions and balances in the GPF for the financial year beginning July 1, 2025.

The rate stood at 12.46 percent during 2024-25, meaning the latest decision represents a reduction of 0.41 percentage points.

The Finance Division said the previous rate of 12.46 percent had been fixed through its resolution issued on September 10, 2025.

“It has now been decided that the rate of profit applicable to the subscriptions and the balances in the General Provident Funds, during the financial year beginning on 1st July, 2025 shall be 12.05 percent per annum,” the resolution stated.

The GPF is a long-term savings mechanism for government employees, under which prescribed monthly contributions are deducted from employees’ salaries and credited to their provident fund accounts.

The annual profit rate determines the return earned on accumulated subscriptions and balances, making the government’s latest decision directly relevant to the savings of federal government employees.

The Finance Division also stated that necessary instructions concerning the profit rate applicable to balances in various Provident Funds under the control of the Ministry of Railways and Ministry of Defence would be issued separately by the respective ministries.—TAHIR AMIN