The long-awaited National Pension and Provident Fund Bill has once again been deferred and will not be tabled for deliberation. Unsatisfied, MPs urged the government to expedite the Bill, stating that the current system is outdated and covers only a small portion of the population. However, the government said reforms require detailed study and technical assessment before a new law can be introduced.
MPs called for urgent reforms to Bhutan’s pension system, which currently covers only around nine per cent of the population.
“Currently, Bhutan’s population stands at around 791,000, but only nine per cent of the population is covered under pension schemes,” said Pempa, Bongo-Chapcha MP, Chhukha, NA.
“If a person resigns before reaching the age of 66, they do not receive any pension benefits. Moreover, when individuals claim a pension after completing 22 years of service, nearly 30 per cent of their actual pension amount is deducted. Recently, a couple who had served the government passed away, but their children were denied pension benefits because they were above the age of 18. Therefore, there is a need for a proper law to address such issues,” said Lhakpa Tshering Tamang, Sergithang MP, Tsirang, NA.
Home Minister Tshering highlighted the need to include Zhung Dratshang in the pension system.
“The Zhung Dratshang, which is one of the most important pillars of the country, has not been included in the pension system. Currently, only around 170 members of the Zhung Dratshang receive pension benefits of Nu 7,000 per month, and even this is not provided by the government but funded by the Zhung Dratshang itself.”
The Chairperson of the Good Governance Committee stressed that the country can no longer delay introducing a proper Pension Act.
During the Second Session of the Fourth Parliament in 2024, the Good Governance Committee moved a motion on the need for a Pension and Provident Fund Bill in view of the growing challenges facing Bhutan’s pension system.
The Committee had recommended that the government table the Pension and Provident Fund Bill as a Private Bill during the Winter Session last year in view of the urgency and importance of the matter.
However, the Ministry of Finance stated that the Pension Bill involves financial matters and therefore should be introduced by the Government rather than as a private bill.
Therefore, it was resolved that the Bill would instead be tabled in the current session.
“We have consulted the World Bank, IMF, New Zealand, and other agencies, and we have now received technical assistance support from the World Bank to carry out the process properly. This is because we need to undertake detailed actuarial modelling, systematic evaluation of reform scenarios, and other complex assessments through proper research without rushing the reforms,” said Finance Minister Lekey Dorji.
The Bill will now be tabled in the next year’s summer session.
Kinley Bidha
Edited by Sonam Pem
