Punjab govt abolishes pension system for new recruits

LAHORE: The Punjab government, in a bid to cut the burden on the public exchequer, has decided to provide a lump-sum pay package to recruits instead of giving a basic pay scale.

This is a substantial policy change, part of the effort of the government to reduce pension liabilities.

A recent notification clarified that all recruits will fall under the ambit of the new policy, while those appointed under the 2018 law would be unaffected.

The new decision comes as part of a broader strategy to minimize pension-related expenses for the provincial government.

The Punjab government has formalized this change through the issuance of a new ordinance, known as the “Punjab Regularization of Service Cancellation Ordinance 2025,” which has come into effect from October 31, 2025.

The ordinance has already been approved by the Governor of Punjab and published in the official Gazette.

Moreover, under the new system, pensions for future employees were abolished, marking a radical turn for the government’s policy of employee benefits.