NPS to Old Pension Scheme: How would it work for J&K govt employees? A Ziraat Times explainer

Ziraat Times Team Report

Srinagar, Sept 28: The Jammu & Kashmir Government has sanctioned a one-time option for a category of government employees presently covered under the New Pension Scheme (NPS) to switch over to the Defined Pension Scheme, commonly referred to as the Old Pension Scheme (OPS).

The Finance Department issued Government Order No. 305-F of 2026 dated September 28, 2026, following approval by the Council of Ministers on September 10, 2026. The order applies to employees who were appointed against posts or vacancies that had been advertised or notified for recruitment before the notification of the New Pension Scheme in Jammu & Kashmir. 

Decision follows representations and court cases

The order traces the issue to the introduction of the Defined Contribution Pension Scheme/National Pension System by the Government of India for employees appointed on or after January 1, 2004.

In Jammu & Kashmir, the government shifted employees appointed or brought on regular establishment on or after January 1, 2010, from the Defined Pension Scheme to the Defined Contribution Pension Scheme through SRO-400 of 2009 dated December 24, 2009.

The Finance Department said representations were subsequently received from J&K government employees seeking extension of a benefit similar to an order issued by the Government of India in 2023.

The Union Government’s Department of Pension and Pensioners’ Welfare had, through Office Memorandum No. 57/05/2021-P&PW(B) dated March 3, 2023, provided a one-time option to certain Central Government employees appointed against posts or vacancies advertised or notified before December 22, 2003, but who joined service on or after January 1, 2004, to be covered under the Central Civil Services (Pension) Rules.

Several J&K employees subsequently approached courts seeking similar treatment. The Finance Department’s order refers to cases including T.A. No. 6563/2021, Ajay Sharma and Others vs UT of J&K and Others; O.A. No. 1466/2023, Mohd. Zaffer vs GAD, UT of J&K and Others; Mohammad Yousuf Wag ay vs Others; and T.A. No. 734/2021, Adiba Rasool vs State of J&K and Others.

According to the order, the courts directed the authorities to consider the applicants’ claims for coverage under the OPS on the analogy of the 2023 Union Government memorandum.

Union government clarified J&K-specific applicability

The matter was examined by the J&K Finance Department and subsequently taken up with the Ministry of Home Affairs.

In a communication dated December 12, 2024, the Ministry of Home Affairs conveyed the views of the Department of Pension and Pensioners’ Welfare that the Union department’s instructions were not automatically applicable to employees of States and Union Territories.

The department stated that service matters of State/UT employees fall outside its jurisdiction and that the concerned State Government or UT administration has to decide the applicability of service rules to its employees.

Following the consultations, the J&K Finance Department examined the proposal with the General Administration Department, Department of Law, Justice and Parliamentary Affairs, and the ARI & Trainings Department.

The proposal was subsequently placed before the Council of Ministers on September 10, 2026. The Council, through Decision No. 129/11/2026, approved the Finance Department’s proposal.

Who is eligible?

Under the Government Order, the one-time option is available to a government employee who:

• was appointed against a post or vacancy that had been advertised/notified for recruitment or appointment before the notification of the Defined Contribution Pension Scheme (NPS) through SRO-400 dated December 24, 2009;

• is presently covered under the New Pension Scheme after joining government service on or after January 1, 2010; and

• otherwise meets the conditions prescribed under the Government Order.

Eligible employees can exercise the option to come under the Defined Pension Scheme (Old Pension Scheme).

Three-month deadline

The option must be exercised within three months from the date of issuance of the Government Order.

The order makes clear that an eligible employee who does not exercise the option within the stipulated three-month period will continue to remain covered under the Defined Contributory Pension Scheme.

Once exercised, the option will be final.

The prescribed application form is enclosed as Annexure-A to the order. The form states that applications are to be submitted on or before December 28, 2026.

Application to be routed through department

Employees seeking the switch are required to submit the prescribed option form to their Drawing and Disbursing Officer (DDO), who will forward it to the Head of Department or appointing authority.

The Head of Department/appointing authority will then forward the case to the concerned administrative department.

The administrative department will scrutinise each case and determine whether the employee is eligible for coverage under the Old Pension Scheme. Necessary orders are to be issued within one month.

The application requires details including the employee’s name, parentage, date of birth, CPIS ID, PRAN number, date of joining government service, department, office, details of the advertisement/notification under which the selection was made, selection-list details, appointment order, post of appointment and current post.

Employees are also required to attach photocopies of the relevant advertisement/notification, selection list, appointment order, PRAN card and service book, with the service book attested by the DDO.

NPS account to be closed after approval

Once an employee is brought under the Defined Pension Scheme, the employee’s NPS account will be closed from the first day of the month following the month in which the order for coverage under the OPS is issued.

The employee will thereafter be required to subscribe to the General Provident Fund (GPF).

The DDO will initiate the process for closure of the NPS account through the concerned Treasury.

Treatment of NPS contributions

The order also lays down a procedure for accounting for the accumulated corpus in the employee’s NPS account.

The employee’s contribution may be deposited under Major Head 8009 for onward credit to the individual’s GPF account, with the account permitted to receive up-to-date interest in accordance with Rule 11 of the General Provident Fund Rules, 1960, as amended from time to time.

The government contribution under NPS is to be accounted for as a minus debit under Major Head 2071—Pension and Other Retirement Benefits.

The increased value of subscriptions arising from appreciation of investments may be accounted for by crediting the amount to the government account under Major Head 0071—Contribution towards Pension and Other Retirement Benefits—800 Other Receipts.

The order directs that the accounting and adjustment of the accumulated corpus be taken up with the Director General, Accounts & Treasuries, Jammu & Kashmir, through the respective Head of Department.

Entire process to be completed within 120 days

The Finance Department has stipulated that the entire exercise, from the date of exercising the option to closure of the NPS account, must be completed within 120 days from the date of issuance of the order by the concerned administrative department.

Where any doubt arises over whether a particular post was advertised or an appointment was made within the ambit of the order, the matter will be referred to the Finance Department.

The order states that the Finance Department’s decision in such cases will be final and binding.

Order issued by Finance Department

The order has been issued by the Government of Jammu & Kashmir Finance Department under the signature of Shailendra Kumar, IAS, Financial Commissioner (Additional Chief Secretary), Finance Department.

It has been circulated to senior government authorities, including the Advocate General, financial commissioners/additional chief secretaries, Principal Accountant General, Principal Secretaries, the J&K Public Service Commission, J&K Legislative Assembly, Director General Accounts and Treasuries, district development commissioners, heads of departments and other concerned offices.

The order also directs publication through the Government Gazette and circulation on the Finance Department website.

Key dates