New Pension Policy for Re-employment in Pakistan | Key Updates 2025

Pakistan's New Pension Policy for Re-Employed Retirees: What You Need to Know (2025 Update)

Published on: May 22, 2025 | Category: Government Policies

The Government of Pakistan's Finance Division has issued a significant update to pension policies affecting federal government employees who take up re-employment after retirement. This change, effective immediately, offers greater flexibility to pensioners considering post-retirement employment opportunities.

Key Changes in the Pension Policy

According to the Office Memorandum dated April 22, 2025 (reference F.No. 9(3)R-6/2024-100), the following important change has been implemented:

New Rule: Federal government pensioners aged 60+ who secure re-employment (whether regular, contract, or any other form) in public service now have the option to choose between:

1. Continuing to receive their pension during employment, or
2. Drawing the salary from their new position

What This Means for Retired Government Employees

This policy revision, based on recommendations from the Pay and Pension Commission-2020, represents a significant improvement for retired federal employees in Pakistan:

• Financial Flexibility: Pensioners can now make the choice that best suits their financial situation when accepting re-employment
• Encourages Continued Service: The policy removes a potential disincentive for experienced professionals to return to public service
• Simplified Process: The option lies with the pensioner, reducing bureaucratic hurdles

Important Considerations

While this policy offers new opportunities, pensioners should carefully evaluate:

• The financial implications of choosing pension vs. salary (compare amounts and tax implications)
• The duration of the re-employment contract
• Whether the new position offers additional benefits that might influence the decision

Implementation Details

The notification states that:

• This policy applies to all forms of public service re-employment after retirement
• Existing instructions on the subject stand amended accordingly
• The change is effective immediately

This progressive policy change by Pakistan's Finance Division demonstrates the government's commitment to creating more flexible retirement options for its experienced workforce. Federal government pensioners now have greater control over their post-retirement career and financial planning.

For official inquiries: Contact Deputy Secretary(R-III) at 051-9245839 or refer to the original notification above.

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