𝐋𝐚𝐰𝐦𝐚𝐤𝐞𝐫𝐬 𝐔𝐫𝐠𝐞 𝐏𝐞𝐧𝐬𝐢𝐨𝐧 𝐀𝐜𝐭 𝐭𝐨 𝐂𝐨𝐮𝐧𝐭𝐞𝐫 𝐀𝐭𝐭𝐫𝐢𝐭𝐢𝐨𝐧 𝐢𝐧 𝐂𝐢𝐯𝐢𝐥 𝐒𝐞𝐫𝐯𝐢𝐜𝐞

…𝑾𝒊𝒕𝒉 4,710 𝒓𝒆𝒔𝒊𝒈𝒏𝒂𝒕𝒊𝒐𝒏𝒔 𝒊𝒏 𝒕𝒉𝒓𝒆𝒆 𝒚𝒆𝒂𝒓𝒔, 𝑴𝑷𝒔 𝒔𝒕𝒓𝒆𝒔𝒔 𝒕𝒉𝒆 𝒏𝒆𝒆𝒅 𝒇𝒐𝒓 𝒓𝒆𝒇𝒐𝒓𝒎𝒔 𝒕𝒐 𝒓𝒆𝒕𝒂𝒊𝒏 𝒕𝒂𝒍𝒆𝒏𝒕 𝒂𝒏𝒅 𝒊𝒎𝒑𝒓𝒐𝒗𝒆 𝒓𝒆𝒕𝒊𝒓𝒆𝒎𝒆𝒏𝒕 𝒃𝒆𝒏𝒆𝒇𝒊𝒕𝒔

By Kezang Choden & Lalit Gurung

The Good Governance Committee (GCC) of the National Assembly tabled a motion on calling for the enactment of a Pension Act to address critical challenges faced by the National Pension and Provident Fund (NPPF).

The committee highlighted the absence of a comprehensive National Pension Policy, despite the NPPF’s 42-year history as a state-owned enterprise. Namgay Dorji, Member of Parliament (MP) from Khamdang-Ramjar, informed the House that although a draft policy was submitted in 2018, the NPPF continues to operate under rules established by an executive order, lacking a formal legal framework.He emphasized that the absence of a Pension Act has led to serious governance and regulatory issues, limiting the fund’s effectiveness in addressing operational and management challenges.

“The lack of a clear and comprehensive legal framework has significant implications for the autonomy and efficiency of the NPPF,” said MP Namgay Dorji. He further stressed that these limitations undermine the institution’s ability to ensure long-term sustainability and effective governance.

The absence of a pension policy has also resulted in an increasing number of civil servants voluntarily resigning before enrolling in the pension scheme. According to the Royal Civil Service Commission (RCSC), 4,710 regular civil servants resigned between January 2021 and August 2024, representing 15.7 percent of the civil service workforce over just three and a half years.

GCC highlighted the urgency of enacting the Pension Act to address these challenges, ensure sustainable governance, and provide a robust legal framework for the NPPF. The proposed legislation aims to establish a clear and comprehensive policy to protect civil servants’ welfare and improve retention rates within the civil service. The NPPF currently functions under the bureaucratic oversight of the Ministry of Finance and the Royal Monetary Authority, limiting its operational autonomy and investment diversification. Unlike other corporate entities, this structure has hindered the fund’s ability to maximize profits and enhance benefits for pensioners.

Kuenga, the MP from Nyishog-Saephu, emphasized the need for immediate reforms in the pension scheme to address the growing trend of experienced civil servants resigning. Highlighting the importance of pensions as a crucial source of income for many retirees, MP Kuenga pointed out that timely corrections to the system could ensure its sustainability while improving the financial security of pensioners.

According to Lyonpo Tandin Wangchuk, the Minister for Health, the NPPF was established on March 30, 2000, as an autonomous agency under an executive order. At present, the NPPF has 61,565 registered members, including 10,284 pensioners. Members of Parliament have called for urgent policy interventions to make the pension scheme more attractive and ensure it serves as a sustainable social security system. Lyonpo Tandin Wangchuk said, “The current pension scheme is a contribution-based system only benefit public servants, covering only 9 percent of the population.”

MPs have urged the government to broaden the scope of the pension scheme under the NPPF to provide better support for retirees while retaining skilled and experienced civil servants within the public sector.

The National Assembly has adopted a motion directing the Ministry of Finance to table a National Pension and Provident Fund Bill in Parliament. The motion, rephrased during deliberations, was approved with a majority vote of 39 in favor, two abstentions, and three against, out of 44 members present.

The House further instructed the government to submit the bill in the upcoming winter session following a thorough review and consultation with relevant stakeholders. This directive highlights the importance of ensuring that the proposed legislation is comprehensive and reflective of the needs and concerns of all parties involved.

The bill is expected to address key issues related to pensions and provident funds, providing a robust framework for the future. The Good Governance Committee (GCC) of the National Assembly tabled a motion on November 21, 2024