In a significant policy reversal, the federal government has restored the dual benefit of pension and salary for retired government employees who are rehired after retirement. The decision takes immediate effect following the withdrawal of earlier restrictions imposed this year as part of pension reform measures.
What Has Changed? (Quick Summary)
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Retired civil, judicial, and military officials can now receive both pension and salary simultaneously upon re-employment.
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The Ministry of Finance has withdrawn two notifications issued in April and June 2025.
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The decision aims to address recruitment challenges in key government bodies, commissions, and tribunals.
Background: Why the Ban Was Introduced
Earlier this year, the government had restricted re-employed retirees to choose between pension or salary, citing fiscal pressure and rising pension liabilities. The move was part of broader reforms linked to international financial commitments and efforts to control long-term expenditure.
In June 2025, the policy was partially softened, allowing retirees to draw pension during re-employment, but with a salary reduction equal to the pension amount. However, strong resistance from senior officials continued.
Why the Government Reversed the Decision
According to officials from the Ministry of Finance, the restriction led to serious difficulties in attracting experienced professionals for specialised roles, particularly in:
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Regulatory authorities
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Commissions
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Tribunals
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Advisory and technical bodies
Officials stated that the number of affected individuals was limited, and the financial savings were minimal, making the restriction impractical.
“Reduced incentives were discouraging experienced professionals from accepting critical public-sector assignments,” a finance ministry representative said.
What the Restoration Means Now
With the withdrawal of the earlier notifications:
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Rehired retirees can once again draw full pension along with salary.
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In some cases, individuals may also receive additional allowances, depending on the role.
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The policy restores the pre-2025 arrangement that was in place for decades.
Impact on Economy and Governance
While the move eases recruitment challenges, critics argue that:
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It increases the financial burden on the national exchequer
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It may limit career progression for younger officers
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It contradicts long-term pension sustainability goals
At the same time, the government has maintained that new entrants into civil and military services will continue under the contributory pension system, signalling a gradual shift rather than a complete rollback of reforms.
Key Takeaways
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✔ Government withdraws ban on pension + salary for rehired retirees
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✔ Decision effective immediately
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✔ Aim: attract experienced professionals
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✔ Fiscal savings from ban termed “negligible”
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✔ Contributory pension scheme for new hires remains intact
Why This Decision Matters
The restoration highlights the delicate balance between economic reform and administrative efficiency. While fiscal discipline remains a priority, the government appears willing to compromise when institutional functioning and expertise are at stake.
