Yangyel Lhaden

Under a special service initiative, the government has allocated Nu two billion for a social protection scheme aimed at benefiting all Bhutanese, according to Prime Minister Tshering Tobgay.

Currently, the National Pension and Provident Fund provides pensions to its members, which include civil servants, employees of state-owned enterprises, corporations, and the armed forces. This encompasses about eight percent of the total population.

The National Policy for Senior Citizens of Bhutan which was launched last year states that the government shall explore the introduction of old-age allowances and expand coverage to all senior citizens through introduction of various pension products and schemes, including contributory and non-contributory schemes.

“One day, we will all grow old, for which monetary support is important such as pension schemes to encompass all segments of society,” the Prime Minister said. “The social protection scheme will be a nationwide programme, requiring thorough study and research to explore the introduction of various social security schemes before being rolled out to benefit all citizens.”

The Prime Minister added that the study would examine ways to encourage youth, future senior citizens, and current senior citizens to participate in pension schemes.

Currently, the pension scheme is limited to its members, as a significant portion of the population is employed in informal jobs. Individuals are classified as having informal jobs if their employment arrangement is not governed by national labour laws, income taxation, social protection, or eligibility for specific employment benefits.

“The purpose of the pension scheme is to provide benefits to members when they reach old age and are no longer able to work, using the monetary contributions they made during their working years,” the Prime Minister said. “Even individuals in the private sector, such as self-employed farmers, will eventually age and be unable to work. That’s why it is crucial for us to expand our pension coverage.”

The current pension scheme mandates 20 years of service, with individuals becoming eligible to receive pensions at the age of 57. However, during the election campaign, the current government pledged to review the 20-year service threshold for pension eligibility.

“Although the purpose of the pension scheme is to provide benefits in old age, if civil servants and pension members retire before completing 20 years of service, it may appear that they are not interested in participating in the pension scheme, focusing solely on immediate benefits rather than future security,” the Prime Minister said. “It is important to conduct a study and develop measures to encourage participation from the public across all sectors in the pension scheme before we decide how to roll out the social protection programme.”

Under the special service initiative, the government also aims to provide medical services to senior citizens directly at their homes, eliminating the need for them to visit hospitals, the Prime Minister announced.“We will also examine the current practices of senior citizens’ benefits and strengthen them.”