Kathmandu, July 5: The government has decided to implement a contribution-based social security system for newly appointed civil servants starting from the upcoming fiscal year. According to the Ministry of Finance, this system will replace the traditional pension and gratuity benefits.
The ministry has issued a circular to all ministries, Nepal Rastra Bank, Nepal Insurance Authority, Securities Board of Nepal, and all public enterprises, boards, committees, and institutions, directing them to enforce the contribution-based system.
They have been asked to make necessary arrangements to implement this system for employees recruited from the next fiscal year onward, in place of pension and gratuity. The government has made it clear that it will not bear any financial liability arising from non-implementation of the system.
To ensure social security for employees, laborers, and others, the government has already brought into effect the Contribution-Based Social Security Act, 2017 and the Retirement Fund Act, 2018, for government employees. The contribution-based retirement system has been in place for civil servants since 2018.
However, some regulatory bodies, institutions, boards, and committees are still providing pension and gratuity benefits under older practices. As per the government’s policy, failure to allocate necessary provisions for post-retirement obligations by public institutions—especially those running at a loss or dependent on government funding—has led to the creation of long-term liabilities.
The Finance Ministry said the new decision was made during the ministerial-level meeting held on Asar 20 (July 4), and official correspondence has already been initiated for implementation.
People's News Monitoring Service