ISLAMABAD: In a major policy reversal, the federal government has withdrawn its notifications governing pension entitlement during re-employment, annulling decisions made earlier this year that restricted retirees from drawing salary and pension simultaneously. The move restores the status quo that existed prior to April 2025, offering immediate relief to thousands of government pensioners returning to service.
An Office Memorandum (OM) issued by the Finance Division on Wednesday formally revoked its earlier notifications dated April 22 and June 19, 2025. The April notification, issued based on recommendations of the Pay and Pension Commission 2020, had required re-employed pensioners above the age of 60 to choose between drawing a pension or a salary during their tenure. This had sparked concerns among retirees, who argued that it undermined financial stability for those returning to government service.
Following widespread objections, the Finance Division had partially relaxed the rule in June 2025, allowing pensioners to continue receiving their pension alongside a salary, subject to a reduction in the salary equivalent to the gross pension. This arrangement applied only to standard pay packages, including BPS, MP Scale, Project Pay Scales, SPPS, and the pay scales of autonomous and statutory bodies.
With the latest decision, both April and June notifications stand annulled, effectively reinstating the pre-April 2025 framework. The Finance Division, however, has not yet indicated whether it will issue fresh guidelines for managing pension and salary during re-employment, leaving many stakeholders awaiting further clarification.
Experts said the rollback reflects the government’s responsiveness to public concerns and highlights the challenges of balancing fiscal prudence with the welfare of retired officials. Pensioners and employees’ associations welcomed the move, describing it as a “positive and timely decision” that restores fairness and avoids undue financial hardship for retirees who resume public service.
As Pakistan continues to manage its pension obligations amid fiscal pressures, policymakers are expected to revisit re-employment rules to ensure sustainable, transparent, and equitable practices for retired officials returning to government service.