Govt allows rehired retired employees to receive salary, pension simultaneously

ISLAMABAD: The federal government has allowed rehired retired government employees to receive both their salary and pension simultaneously.

The decision applies to retired government servants who are reappointed to government jobs after retirement. The Ministry of Finance has issued an office memorandum withdrawing two earlier notifications dated April 22, 2025, and June 19, 2025, with immediate effect.

The new office memorandum has been circulated to all federal ministries and divisions.

Previously, retired public servants rejoining government service after the age of 60 were required to choose between drawing a salary or receiving their pension during the period of re-employment. That restriction was introduced as part of broader pension reforms aimed at reducing the government’s growing pension liabilities.

In an earlier notification, the Ministry of Finance’s Regulation Wing had stated that a pensioner re-employed in public service could retain either the pension or the salary of the new employment, but not both at the same time.

The policy was later partially relaxed through a June 19 notification, which allowed pensioners to continue receiving their pension on the condition that their salary would be reduced by an amount equal to the gross pension. Both of these notifications have now been withdrawn.

The earlier restrictions were introduced under pension reform measures linked to requirements of the International Monetary Fund (IMF) and the World Bank, as pension liabilities were described as a growing financial burden on the national exchequer.

However, opposition to the reforms persisted, and certain groups continued to demand the restoration of full pension benefits alongside salaries for re-employed retirees.