Kathmandu. The Government has been entrusted with the responsibility of operating the pension system based on the contributions made to the Employees’ Reserve Fund immediately. According to the provisions of the Pension Fund Act, 2, it has been decided to delegate the responsibility to the Employees’ Reserve Fund till the formation of the Pension Fund.
Until the formation of the Fund in the Act, there is a provision that the Government may designate any body for the operation of the fund. Earlier, the Employees’ Reserve Fund has been making arrangements for employee pensions. The Act to be made in relation to the retirement fund was approved by the President on March 7. After this Act has been ratified, the provision regarding the pension of the employees who have been enrolled in government service has come into force.
The Act provides for the establishment of a pension fund for the purpose of providing money, including pension, to the employees. The Fund is an automated and organized organization. It has the right to acquire, consume, store, sell and sell movable real estate.
What’s on law?
The Treasury Office has a provision to deduct 5 percent of the monthly salary of the employees and deposit 100 percent of that amount by the Government of Nepal. There is a provision that such funds should not be deducted when there is an emergency, extra leave or suspension.
In the case of suspension, if the suspension is suspended but the suspension is granted, then a lone government will arrange to deposit the funds in the fund. The fund mentions that each employee will have a separate personal retirement account.
Employees who are discharged from service after completing service period of 5 years or more receive monthly retirement from the fund. Arrangements have been made for the family to receive family pension if the employee dies at the end of the service period.
In the event of an employee being dismissed from service due to future disqualification, only his deductible and interest will be paid. Employees affiliated to the Civil Service, Nepalese Army, Nepal Police, Armed Police and Teacher Services have been affiliated with this fund.
The contribution-based pension system has been introduced when the government has to spend big money on pensions every year. The state fund has already spent over Rs 2 billion for pensions alone. The implementation of this system will save the government a large amount of pension. The Act provides for the government to provide the funds for retirement or subsidy required by the fund every year.
Funds have been given to facilitate investment of various securities, periodic deposits of commercial banks, liquidity deposits, loan investments in any industry and organized institution and investment in shares in banks and financial institutions. Funds can invest in treasury bills that are sold by the Government of Nepal.
There is a provision of executive director and staff to operate the fund. In case of non-formation of funds, it was decided to run the program of funds from the staff reserve immediately, the finance ministry said.
The government has set up a fund for civil servants to implement the contribution pension system and to arrange retirement pension or subsidy for the employees who have been appointed by law to receive retirement from the government fund.Reference