PAKISTAN’S economy rests heavily on the shoulders of its overseas workers, especially in the Gulf, who remit billions of dollars each year yet remain almost entirely outside any formal, state-backed old-age security. Most will never obtain citizenship where they work. They can spend decades in Riyadh, Dubai or Doha and still be asked to leave the moment their labour is not needed. When they return, their financial future rests on fragmented savings but with no guaranteed monthly income and no structured way to protect their families. As a pensions professional, I find this gap both striking and unnecessary. It is possible to design a pension arrangement for overseas Pakistanis that protects them in retirement, channels remittances through formal routes, and strengthens Pakistan’s long-term savings base, while keeping risks manageable for the state.
Globally, pension systems are moving towards defined contribution (DC) models, where each worker has an individual account and the final pension depends on contributions and investment returns. Pakistan is also moving in that direction, and rightly so.
DC is more transparent and fiscally predictable; however, it places investment and longevity risk on the individual. A worker in the Gulf, juggling long shifts is not well placed to manage complex retirement risks or choose between investment funds. What he needs is not a menu of products; but a comprehensible promise: if I contribute this much, for this long, I (or my family) will receive roughly this much, every month in retirement, back home in Pakistan. This is where a carefully designed defined benefit (DB) style structure becomes relevant.
The term ‘DB pension’ understandably raises concerns in Pakistan because of existing unfunded schemes. But the real problem with those arrangements is not that they are DB; it is that they are largely pay-as-you-go, with benefits paid directly from the budget. For overseas workers, we can turn this model on its head: create a fully funded, professionally managed pension fund into which overseas Pakistanis contribute while they are abroad. Future pensions would be calculated using a formula based on years of contributions and pensionable income, and benefits would be paid primarily from the assets accumulated in this dedicated fund. The state’s main role would be regulation and governance. Regular actuarial reviews and pre-agreed adjustment tools — modest changes in contribution rates, accrual rates or retirement age, if needed — would keep the scheme on a sustainable path.
A pension plan can be designed for Pakistanis working abroad.
Pakistan already has important building blocks, including digital identity systems and, importantly, the Roshan Digital Account framework on which this could be layered to keep costs down and reduce administrative friction. Enrolment, contribution collection and account viewing could run through familiar online and mobile channels, giving a worker in Jeddah or Doha the ability to sign up, set a monthly pension contribution from foreign-currency earnings and monitor projected retirement income on their phone.
The way such a pension would redirect remittances is equally important. At present, a large share of overseas savings is poured into property which fuels speculative bubbles and leaves the economy short of the long-term capital needed for infrastructure and productive investment. A credible pension arrangement for overseas Pakistanis would offer an alternative. Steady contributions would mean more formal remittances, deeper capital markets and a pool of long-term savings that supports development without constant recourse to expensive external borrowing.
Trust will ultimately determine whether such a scheme succeeds. Ov-erseas workers have every reason to be cautious about gra-nd announcements. Governance would need to be visibly strong: an in-dependent board with representation from overseas Pakistanis, robust regulatory oversight, transparent reporting and a modern digital interface so that members can see contributions and projected pensions in real time.
Such an overseas workers’ pension would not replace broader reforms or the expansion of DC arrangements; it would complement them. Domestically, DC remains the right direction for new entrants and private sector workers. But for overseas Pakistanis, a well-regulated, fully funded DB promise is the missing piece that can persuade them to invest confidently, at scale, in a Pakistan-administered pension framework. Implemented properly, it offers protection for some of our most important but vulnerable citizens, a boost to formal remittances and national savings. Our overseas workers have carried Pakistan for decades. It is time we design a pension system that carries them when they can no longer work.
The writer works as a pensions investment consultant in the UK, advising on pension design and investment strategy.
Published in Dawn, February 7th, 2026