Islamabad, December 18, 2025 – In a significant policy reversal, the federal government has withdrawn recent notifications regulating pension entitlement during re-employment, scrapping decisions introduced earlier this year on how retired officials could receive 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According to an Office Memorandum (OM) issued on Wednesday, the Finance Division has withdrawn its earlier OMs dated April 22, 2025, and June 19, 2025, which had set out rules governing pension payments for retirees re-employed after superannuation.
The April 2025 notification, issued on the recommendations of the Pay and Pension Commission 2020, had stipulated that re-employed pensioners above the age of 60 could choose to draw either a pension or a salary, but not both, during the period of re-employment. The move sparked criticism from various quarters, including affected employees and stakeholder groups.
In response to these concerns, the Finance Division partially eased the restrictions through another OM on June 19, 2025. Under that amendment, pensioners were allowed to continue receiving their pension during re-employment, but their salary was reduced by an amount equal to the gross pension. This relaxation applied only to re-employment on standard pay packages, including Basic Pay Scale (BPS), MP Scale, Project Pay Scales, Special Professional Pay Scales (SPPS), and standard pay scales of autonomous and statutory bodies.
With the issuance of the latest OM, both notifications have now been annulled with immediate effect, effectively restoring the position that existed prior to April 2025. However, the Finance Division has yet to clarify whether new guidelines will be issued or if previously established rules will automatically come back into force.
The decision is expected to bring temporary relief to re-employed pensioners but also raises questions about the government’s long-term strategy on pension reforms, especially amid ongoing efforts to rationalize public sector expenditures.