The government has rolled back a recent restriction that stopped retired public servants from drawing both a pension and a salary after being rehired, reversing a move that had been presented as a key pension reform.
A short notification issued by the Ministry of Finance on Friday withdrew two earlier orders dated April 22 and June 19, 2025, with immediate effect. The decision restores the long-standing arrangement under which retired civil, judicial and military officials can receive their pension alongside a salary if they return to public service.
Policy reversal after bureaucratic pressure
Under the April 22 order, retired federal employees who were re-employed after the age of 60 were required to choose between their pension and their new salary. The measure applied to appointments made on both contract and regular terms and was framed as part of broader efforts to contain rising pension costs.
However, the policy faced resistance from senior bureaucrats. In June, the government amended the rule, allowing pensioners to continue receiving their pension while in service, provided their salary was reduced by an amount equal to the gross pension. Even this change failed to satisfy critics, and pressure continued to build within the bureaucracy.
According to Dawn, the latest notification has now scrapped both orders entirely, bringing back the older and more generous system. Under this arrangement, rehired officials can draw a full salary and pension at the same time. In some cases, individuals may also receive multiple pensions.
Fiscal concerns and IMF-linked reforms
The restriction on double benefits was part of a wider set of pension reforms tied to Pakistan’s IMF programme, aimed at slowing the rapid growth of pension liabilities. The proposal was first announced in the 2022 to 2023 budget by then finance minister Ishaq Dar and later reintroduced by Finance Minister Muhammad Aurangzeb ahead of IMF approval of a new loan programme.
Other reform measures have also faced delays. A contributory pension scheme for armed forces personnel has been pushed back to 2026, despite an earlier notification setting June 2025 as the start date.
Finance ministry spokesperson Qumar Sarwar Abbasi said the withdrawn policy made it difficult to attract experienced professionals for commissions, tribunals and similar bodies due to reduced incentives. He added that the change affected only a small number of people and delivered negligible fiscal savings.
