Govt withdraws restrictions on pension, salary for post-retirement employees

The federal government has withdrawn both notifications that imposed restrictions on receiving pension and salary for individuals who take up government employment after retirement. According to a new office memorandum issued by the Ministry of Finance, the withdrawal of these notifications will take effect immediately.

The Ministry of Finance has withdrawn the notification issued on April 22, 2025, which had required retired individuals returning to government service to choose between receiving either a pension or a salary.

Under that notification, federal pensioners who resumed employment after the age of 60 were prohibited from receiving both pension and salary simultaneously.

Read: Govt implements new pension scheme

The federal government officially implemented the Contributory Pension Scheme for public servants in March, marking a major reform in the pension system. The reform aimed to slow the rising pension expenditure, estimated at Rs1.05 trillion for 2024-25, up 29% from last year.

Under the new rules, employees would not be allowed to withdraw funds before retirement; upon retirement, they may withdraw up to 25%, with the rest invested for 20 years or until age 80.