Re-employment after retirement: Govt withdraws notifications about pension

ISLAMABAD: In a major policy reversal, the federal government withdrew with immediate effect its recent notifications governing pension during re-employment, scrapping decisions taken just months earlier to regulate how retired officials could draw salary and pension simultaneously.

According to an Office Memorandum (OM) issued on Wednesday, the Finance Division has withdrawn its earlier OMs dated April 22, 2025 and June 19, 2025, which had laid down the framework for pension entitlement in case of re-employment after retirement.

The now-withdrawn April 2025 notification—issued on the recommendations of the Pay and Pension Commission 2020—had given re-employed pensioners the option to either draw a pension or a salary, but not both, during the tenure of re-employment after the age of 60.

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However, following objections from various stakeholders, the Finance Division had partially relaxed the rule through another OM on June 19, 2025, allowing pensioners to continue drawing pension during re-employment, subject to a reduction in salary equal to the gross pension amount. This arrangement was applicable only to re-employment on standard pay packages, including BPS, MP Scale, Project Pay Scales, SPPS, and standard pay scales of autonomous and statutory bodies.

With the latest decision, both amendments stand annulled, effectively restoring the earlier position that existed before April 2025. The Finance Division has not yet clarified whether fresh instructions will be issued or if previous long-standing rules will automatically revive.

Copyright Business Recorder, 2025