The Government of Pakistan, in response to pressures from the International Monetary Fund (IMF), and in continuous attempts to reduce the fiscal burden recently announced a policy limiting compensation for re-employed retired government officers. Officials brought back into government roles post-retirement were made to choose between receiving their pension or a salary, not both. Days later, however, the Ministry of Finance issued a clarification saying “…concerns have been raised by various stakeholders that pensioners opting for the salary of their re-employment, may face difficulties for the revival of their suspended pension once the re-employment ends. [Hence] to facilitate and avoid future complications, it has been decided to allow the pensioners to continue to draw their pension during the re-employment period subject to the condition that their salary shall be reduced by an amount equivalent their gross pension.”
While the stated aims of this move include reducing the state’s pension burden, improving transparency, and fostering more rational skill-driven public sector acquisitions, the underlying structural dynamics it exposes raise deeper questions about the bureaucracy’s operational logic.
Three key consequences emerge from the implementation of the revised policy – and none bode well for institutional betterment.
Understanding the implications of the policy requires a closer look at how the Pakistani bureaucratic machinery has historically absorbed retired officials. More often than not, the justification for hiring ex-employees rests on the belief that the experience held by retired officials is irreplaceable, and those who have never served within government ranks cannot replace it. These former officers’ familiarity with legacy systems, especially those rooted in colonial-era laws, is seen as an asset.
While it may be prudent to hire ex-employees for their understanding of the colonial laws under which the state still functions, it still begs the question as to why horizontal learning of the same cannot be possible in order to have an innovate and larger pool of candidates to choose from. Case in point is the system of land acquisition under the Land Acquisition Act, 1872, where the state employs ex-patwaris and ex-qanun gos for land acquisition considering their network, experience, and understanding of the law. Prone to corruption, this system not only bleeds nepotism but also stifles innovation and change.
Nevertheless, this remains the prevailing structure of Pakistan’s bureaucracy and the main reason why former officials continue to occupy a significant share of roles within government and state-sanctioned institutions.
Against this backdrop, three key consequences emerge from the implementation of the revised policy – and none bode well for institutional betterment.
The first is the likelihood of attrition. Faced with the choice between pension and salary, many officials are expected to opt for their pensions. The pension, unlike a salary, continues to benefit surviving spouses or unmarried daughters after the officer’s death, making it a more secure option. While this may help reduce dual payments, it exposes a central contradiction in the policy and in the institutions on which it is applicable.
“The state risks sidelining individuals whose entire careers have been spent understanding and operating within the bureaucratic machinery”
Dr Waqar Masood, former Federal Finance Secretary
Given that Pakistan’s bureaucracy operates through a self-reinforcing system where both current and former officials remain central to the functioning of state machinery, a policy that prompts their exit risks weakening institutions still reliant on insular practices and a tightly held bureaucratic lexicon.
The guarded response from the Federal Ombudsperson Secretariat helps to understand that: “The recent government decision restricting retired professionals from drawing both a pension and a salary does have an impact on our Secretariat, as we have engaged some retired individuals belonging to the Provincial Governments, whose expertise and experience are valuable to our work. Right now, this policy is not applicable to the retired pensioners of the Provincial Governments. Right now, the effect is not substantial enough to disrupt our core day-to-day operations. We are currently assessing the extent of the impact internally and exploring possible adjustments,” FOSPAH told HUM News Digital.
Former federal secretary, Dr Waqar Masood agrees. He told HUM News Digital, “We must begin by asking whether these appointments were made on merit or influenced by high-level connections. If they were merit-based, then the state risks sidelining individuals whose entire careers have been spent understanding and operating within the bureaucratic machinery. That kind of institutional knowledge isn’t easily replaced.”
He added that while some may choose to continue if salaries are higher than pensions, the broader impact on departmental efficiency and efficacy must not be overlooked.
The second outcome is more complex. Beyond competence, many of these appointments rely on informal networks – seniority, personal connections, and influence within the machinery. These traits often determine who can move files, clear bottlenecks, or secure approvals. If such individuals begin to exit, departments that lean on these networks risk operational slowdowns. Conversely, if they stay but under reduced compensation, the state may find itself in the paradoxical position of trying to reform a system while still relying on the very traits it seeks to move beyond.
The government is dabbling with yet another strategy to counter this impact. Earlier in June, Finance Minister Muhammad Aurangzeb, in a Senate committee meeting expressed support for raising the retirement age – first to 62 and potentially higher – citing his own experience in the banking sector. He argued that rather than rehiring retired officials, their indispensable expertise could be retained more efficiently by simply extending their tenure. Speaking to HUM News, an official of the Finance Ministry reiterated this as a solution to the problem of pensions vs salaries debate.
“Connections – unlike system – provide adaptability beyond legal limitations making them more appropriate for Pakistan’s public operations landscape“
Still, even if the adjusted salary-pension model is enforced, it leaves untouched the broader costs tied to re-employment: perks, protocol, allowances, and the informal privileges of office. Moreover, the persistence of a network-centric governance culture raises questions about the system’s resistance to change.
As one serving bureaucrat put it, speaking to HUM News on condition of anonymity, “Has anybody thought why systems don’t work but networks do? While the system may lack memory due to the very personality driven approach practice, networks provide adaptability beyond legal limitations making them more appropriate for Pakistan’s public operations landscape.”
His remarks underscore a key tension. Efforts to enforce fiscal discipline cannot succeed unless institutional reforms address the foundations of administrative functioning. So long as departments rely on personalised influence over procedural integrity, marginal tweaks – however well-intentioned – remain unlikely to alter the state’s structural trajectory.
Finally, the third and the most likely outcome of this policy is quiet non-compliance. In many cases, re-employed officials may simply withhold their pension slips from finance departments, allowing both streams of compensation to continue unabated. Foreign organisations may not cross-verify pension receipts; domestic departments may lack the mandate – or courage – to enforce deductions. In the absence of stringent audits or follow-up, such dual payments could persist undetected.
Even if detected, such discrepancies risk being reduced to a footnote in the larger story of under-capacitated departments. Past audits of state-owned enterprises (SOEs) show a consistent pattern: irregularities are acknowledged but rarely rectified. Financial constraints, political calculations, and institutional fatigue all play their part.
In the end, what this episode reveals is not just a debate over compensation, but a window into how governance continues to function in Pakistan, through habit, hierarchy, and human workarounds. Whether this policy will disrupt that cycle, or quietly dissolve into it, remains to be seen!