With a fund size of over Nu 50bn, the National Pension and Provident Fund (NPPF) has invested in assets like loans and bonds, term deposits with banks, and real estate among others. According to the chief executive officer of the NPPF, the organisation has invested over 90 per cent of its total fund size. However, the CEO says diversifying NPPF’s investment is a challenge given the limited investment avenues in the country.
The National Pension and Provident Fund is a major non-banking financial institution that manages pension and provident fund schemes of civil servants, employees of state-owned enterprises, corporations, and the Armed Forces.
The NPPF also manage the provident funds of several private companies.
The accumulated funds are invested in various assets to increase revenue and ensure the sustainability of the fund.
As of June 2022, the NPPF has invested over Nu 20bn in term deposits with banks.
A further Nu 18bn is invested in corporate and member loans.
The NPPF also bought over Nu 2bn worth of bonds and has invested almost Nu 2.5bn as equities in 15 companies listed on the Bhutan Stock Index.
The NPPF CEO is hopeful that investment avenues in the country will broaden.
“I think there will be some avenues added to the limited avenues we have in the country today. With that also whatever fund in the form of contribution we add, the investment ratio is not less than ninety per cent. We are fully utilizing whatever we get. We keep a very minimum for daily transactions. So otherwise, if you keep it idle then it will affect the return and that is when the funding deficit arises,” said Dorji Penjor, Chief Executive Officer.
The NPPF’s income for the 2021-2022 financial year dropped by over Nu 650 M compared to the previous year.
According to the NPPF, the decrease was due to poor economic performance owing to the COVID-19 pandemic and non-declaration of dividends by companies the NPPF has invested in equities.
The NPPF received more than Nu 900 M in provident fund contributions from its members between July and December of last year.
Kinzang Lhadon
Edited by Sherub Dorji
