MUZAFFARABAD: (Arqam Maqbool) – The Azad Jammu and Kashmir (AJK) government has approved additional funding to clear pension payment shortfalls of retired employees of local government (LG) institutions, following long-standing complaints of delays and administrative bottlenecks.
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According to an official notification, the approval was given in the light of the cabinet decision to address discrepancies in pension payments for the period from December 2024 to June 2026.
As part of the move, a separate “Local Bodies Pension” head has been created in the 2025–26 budget, with an additional allocation of Rs510.89 million to cover the shortfall.
Under the approved mechanism, pension payments from December 2024 to May 1, 2025, will be made at the departmental level after reconciliation by the Local Funds Audit Directorate. Payments from May 2, 2025, onwards will be processed through the Accountant General’s (AG) Office in accordance with the Pension Fund Management Procedure notified on Nov 26, 2025.
Previously, pensions for retired LG employees were disbursed through the Local Government Board via a dedicated pension fund, which was expected to receive contributions from three sources: 3 percent from employees, 15 percent from LG institutions, and a government grant to cover the deficit between contributions and actual disbursements.
However, apart from the 3percent deduction from employees’ salaries, the remaining contributions were often delayed, which hampered the timely disbursement of pensions. This persistent issue had led LG employees to repeatedly demand a shift to the AG Office, as had been the practice in other government departments. On several occasions, they also held demonstrations and observed strikes over the matter, without success.
In response, the government had earlier decided to shift pension disbursement to a centralised mechanism to ensure timely and transparent payments.
The notification added that future pension deductions would be adjusted from the grant-in-aid provided to LG institutions, while all related expenditures would remain subject to audit under existing rules.
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