National Pension and Provident Fund

The institution of retirement scheme was first introduced through the benevolence of the “Great Fourth” Druk Gyalpo Jigme Singye Wangchuck in 1961. It started with a gratuity scheme and then the introduction of government employees provident fund (GEPF) benefits administered by the Royal Insurance Corporation of Bhutan (RICB). This was further restructured and replaced by taking over GEPF by National Pension and Provident Fund (NPPF) in 1978. Since then, the NPPF has been serving its existence as a significant tool of social safety net for its beneficiaries.

The National Pension and Provident Fund Plan (NPPFP) constitutes two-levels of retirement protection plan – technically known as Tier I – Pension and Tier II – Provident Fund. The objective is to provide monthly income (pension) as well as lump sum payment (provident fund) to the members on retirement. To maintain judicious administration of the fund, the NPPF facilitates corporate social responsibility through prudent investment of the fund. As for instance, NPPF provides loan facilities – education loan, student loan, housing loan and new member’s loan to its members; invests in loans and bonds with major companies like the hydropower investments and has invested in equity shares of notable companies.

The NPPF is also the largest Real Estate developer in the country comprising mainly of residential buildings (92 residential buildings) located in major cities of Bhutan. More plans are ongoing to establish its presence in all 20 Dzongkhags to curb the need of affordable housing. Further, to comfort the transactions, the NPPF has launched online payment services in collaboration with Bank of Bhutan. Members can now pay their loans through such services, easing the way of doing business with NPPF. Additional initiatives in building a dynamic ICT facility is underway to reach out to its members in large.

The Executive Order 2002 officially established the NPPF as an autonomous public organization responsible for the management and administration of civil, armed forces and government owned corporations retirement plans in Bhutan. It functions under the direction and supervision of the Board of Directors (National Pension Board) consisting of members represented from stakeholders (from Ministries and Corporations) which are further supplemented by Independent Committees. The NPPF provides services to 445 government and corporate agencies and armed forces and has a membership base of 52,000 members. There are 4800 pensioners as of now.

NPPF holds 13.33% equity share in FITI.