Nepal | October 15, 2019

EPF proposes to manage pension fund

Himalayan News Service

Kathmandu, September 16

The Employees Provident Fund (EPF) has expressed willingness to manage the pension fund envisioned by the government. The government has envisioned to initiate contributory pension scheme through the fiscal budget 2017-18 and the bill for the contributory pension scheme has been submitted to the Cabinet for its approval before it is tabled at the Parliament.

In consideration of government’s liability on pension sky-rocketing over the years, the bill has envisioned separate fund for pension, in which the government employees would contribute during their service tenure and the government would also chip in to the fund. On the occasion of celebration of 56 years of establishment, the EPF has sought the government’s nod for the pension fund operation.

“EPF has signed memorandum of understanding with the NPS Korea, which is third-largest pension fund operator in the world, and is also negotiating with BPJS Ketenagakerjaan of Indonesia for technical know-how to manage the pension fund,” said Deepak Rauniyar, acting administrator of EPF. “If things go as per plan, EPF will be well-equipped to manage the fund.”

The government has to bring the pension fund into operation within three months after the bill is approved by the Parliament. Once the government’s contributory pension fund comes into operation, the civil servants, Nepal Police, Nepali Army, teachers and other government staffers would have to put aside 10 per cent of their monthly salary for their pension. The government would also contribute a certain amount to create the fund.

The fund operator can make investments in government securities, fixed deposits of banks and financial institutions, profit-making productive sectors by itself and in consortium to expand fund size, as per draft bill of the pension scheme.

“The long experience of EPF in managing employees’ provident fund may be fruitful in managing the government’s new pension fund scheme,” said Rajendra Kafle, chief officer of the EPF, adding, “The pension fund that the government is planning to initiate has similar characteristics like that of employees provident fund and we are also seeking technical expertise from reputed pension managing organisations of South Korea and Indonesia.”

The draft bill has proposed financial comptroller general to chair the pension fund. EPF celebrated its 56 years of establishment in the presence of State Minister for Finance Udaya Shumsher Rana, Chief Secretary Rajendra Kishor Kshetry, Revenue Secretary and Chair of EPF Sishir Kumar Dhungana and Energy Secretary Anup
Kumar Upadhyay, among other high-ranking government officials.

Employees Provident Fund at glance

Total contributors 550,000
Total contributing offices 30,000
Provident fund Rs 245.27bn
Reserve fund Rs 278m
Other liabilities and provisions Rs 2.44bn
Loan to contributors Rs 137.53bn
Project loan Rs 33.16bn
Fixed deposit in banks Rs 54.69bn
Investment in the government bonds Rs 13.99bn
Investment in shares Rs 3.06bn
Investment in buildings and fixed assets Rs 1.08bn
Other assets Rs 2.36bn

A version of this article appears in print on September 17, 2017 of The Himalayan Times.

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