J&K’s Pension Bill Projected To Double 10 Years, OPS Unsustainable: Officials

Jammu : The pension bill of the Jammu and Kashmir government is set to double in the 10-year period between 2020-30, with approximately 2.48 lakh retired employees being paid allowances, officials said.
The Jammu and Kashmir administration also said there is no proposal under consideration to revive the Old Pension Scheme (OPS), asserting that it would be fiscally unsustainable in the long run and could pose significant risks to financial stability.
As per official data of the government, Rs 5,829 crore were paid as pension to retired employees in 2020-21 and the figure is set to go up to Rs 11,798 crore in 2030-31. This is as per a government reply to a cut motion in the Jammu and Kashmir assembly recently.
The year-wise pension outgo over the last five years has shown a steady rise — Rs 6,668 crore in 2021-22, Rs 7,463 crore in 2022-23, Rs 8,364 crore in 2023-24, Rs 9,350 crore in 2024-25 and Rs 9,127 crore in 2025-26.
Based on the number of employees retiring, the pension outgo is projected to increase further in the coming years. It is estimated to be Rs 11,798 crore in 2030-31.
Officials said that the expansion in pension commitments may continue till the early 2040s, after which the burden is expected to stabilise as employees covered under OPS substantially retire.
They said that the introduction of the New Pension Scheme (NPS) in 2010 provides a sustainable pension framework with effective fund management, unlike OPS which does not have a dedicated pension fund.
They said that Jammu and Kashmir, being an expenditure-led region with modest revenue receipts and limited avenues for investment, has witnessed disproportionate growth in pension liabilities in the past.
Earlier also, pension expenditure had nearly doubled from Rs 731 crore in 2004-05 to Rs 1,495 crore in 2009-10, they said.
Following a cabinet decision in 2009, the government transitioned from a Defined Benefit Pension Scheme — OPS — to a Defined Contribution Pension Scheme — NPS — for all government employees appointed on or after January 1, 2010, through amendments in the J-K Civil Service Regulations, they said.
They further maintained that while fulfilling its commitment to eligible pensioners under OPS, the government ensures that developmental allocations and activities are not adversely affected. Once the pension outgo stabilises around 2040, proportionately more funds are expected to be available for the development sector, it added. (Agencies)