Contributory Pension System

A Contributory Pension System is a retirement plan where both employees and their employers regularly contribute a set portion of the employee’s salary into a dedicated fund. Over time, these contributions grow through investments, building a savings pool. When employees retire, they receive regular income from this fund, providing financial security in old age. This system shifts the responsibility of saving for retirement from the government or informal arrangements to structured contributions by individuals and their employers, ensuring a more predictable and sustainable source of income during retirement years.