Govt allows retired employees to pick pension or pay on rehire

ISLAMABAD: Pakistan’s federal government has amended its pension policy to allow retired employees who are re-employed after the age of 60 to choose between continuing their pension or receiving a salary during their new term of service.

According to an official memorandum issued by the Finance Division’s Regulations Wing, the change follows recommendations made by the Pay and Pension Commission 2020. The revised rule applies to all forms of post-retirement employment — including regular, contract, or any other form — in the public sector.

Previously, pensioners re-entering government service could face deductions or complications concerning their pension entitlements. The new policy provides clarity and flexibility, enabling eligible individuals to make a choice depending on which stream of income is more beneficial during re-employment.

The decision takes immediate effect, superseding earlier instructions on the subject, the memorandum noted. The move is likely aimed at attracting experienced professionals back into the public sector without financial disincentives, while potentially reducing double-dipping costs to the exchequer if pensioners opt for salary only.