Financial security

Formulate a national policy to ensure the financial security of the elderly

Yangyel Lhaden

When stakeholders came together to formulate a national policy for the elderly in Bhutan in Thimphu on May 19, everyone agreed on the need for financial security for the elderly population and recommended a pension plan.

Stakeholders included representatives of Zhung Dratshang, the armed forces, non-governmental organizations, civil society organizations (CSOs), the attorney general’s office, and representatives of older people.

They recommended a pension plan for the benefit of the entire population, deducting a certain percentage from the salary of employees and financial institutions to contribute to the social protection of the elderly, and a universal basic income.

Few studies available from National Bureau of Statistics (NSB) 2017 show that older people face financial problems, food insufficiency, lack of land, debt burden, abandonment, lack of respect, discrimination and social exclusion in certain aspects.

According to the 2017 NSB report, 63% of the elderly population have financial problems, 15% are in debt, 22% do not own land, 30% live in poor housing and 26% of them face insufficiency. eating.

The National Pension and Provident Fund (NPPF) has 65,890 members, which is only about eight percent of the country’s total population.

The NPPF program is intended only for civil servants, employees of public enterprises and the mixed sector, members of the armed forces, employees of the Build Bhutan project and the private sector.

Leytshog drungchen with Zhung Dratshang, Ugen Namgyal, said pension schemes did not cover the vulnerable population and only benefited those who were employed. “There are a lot of people who are not covered by NPPF schemes.”

He is working on a proposal to include around 7,000 monks and nuns under Zhung Dratshang under the pension plan.

Ugen Namgyal said his proposal included a massive investment of funds as monks and nuns would not be able to pay monthly. “If my proposal is successful, it will contribute to additional pension coverage of around 1.25% and provide old age income security for nuns and monks.”

A retired civil servant, Sonam Tshewang, said that for a continuous flow of money to support the elderly, the policy should regulate financial institutions to contribute even at least 0.01% of their income to constitute a reserve for financial protection. “NPPF could also look for a program for people who can make a monthly deposit of around Nu500 or Nu1000.”

An NPPF official said they were exploring programs that would benefit the general population, but the lack of data to study whether it would be possible to include other groups and programs such as the monthly deposit of Nu 500 was limited.

“NPPF and Royal Insurance Corporation of Bhutan Limited (RICBL) are at great risk with huge return and limited income for which we have to study carefully to create new schemes so as not to suffer losses,” he said. .

NPPF has a non-performing loan of 0.51% with a fund size of Nu(M)48,488.92 million and total income of Nu(3,001.96 million). There are 8,264 retirees.

The NPPF official said that NPPF in partnership with RICBL started Lotedh Scheme since 2005 as a corporate social responsibility to provide 100,000 Nu for funeral rites to members and their families.

“Members invest Nu 270 per month and if we calculate it will take NPPF 30 years to earn Nu 100,000. The question is, will we ever recover Nu 100,000 day with a monthly investment? he asked.

The head of the UN Population Fund, Phuntsho Wangyel, said there is little the NPPF and RICBL can do to provide pensions to all because they have to think about making profit and ensuring sustainability. “NPPF can only assist and seek other programs if there is a directive from policy and government.”

The NPPF official said he recommended policy consideration for senior citizens with universal coverage where most people get it. “There should be an adequate and comprehensive range of benefits with a sustainably funded system.”

He said the provisions should be rights-based and inclusive and that adaptation to development in the world of work should be taken into account for the pension of elderly citizens in the policy.

Meanwhile, the Gross National Happiness Commission Secretariat will hold a series of policy formulation workshops, panel discussions and presentations across different sectors ahead of the launch of the National Seniors Policy in October.