Lotedh scheme, which is an extension of pension, had its benefit risen to Nu 100,000 from Nu 50,000.
Chairman of the Lotedh scheme, Dasho Nima Wangdi, and Royal Insurance Corporation of Bhutan Limited’s (RICBL) chief executive officer Karma signed an MoU on May 31 to enhance the benefit amount.
Initially, Nu 250 was deducted from the pension payment monthly. Nu 125 was paid as premium to RICBL covering life insurance claim of Nu, 50,000. The premium to RICBL has now been increased to Nu 240 and the benefit enhanced to Nu 100,000.
The scheme was primarily initiated to provide semso to the immediate family members during bereavement.
Dasho Nima Wangdi said that having the scheme would be a comfort for the pensioner. “The scheme is not only for civil servants but for all pensioners. Family members can avail of the benefit by producing a death certificate.”
It is a voluntary scheme that is offered to pensioners only, he added. “We needed some fund in the scheme for immediate disbursement.”
Dasho Nima Wangdi said that RICBL is also taking risk with the scheme. “With just Nu 240 every month from about a thousand members, there are only about Nu 200,000 in the scheme. If two members have unfortunate incidences, then the whole sum gets wiped out.”
He said that it was encouraging to see RICB and National Pension and Provident Fund (NPPF) supporting the scheme as part of their social corporate responsibility by managing risks and admimistration aspect.
“Now with the increase in the benefit, we hope that all pensioners will join the scheme. If the number of members is more, there is a possibility of further revision of the benefit,” Dasho Nima Wangdi said.
Although the benefit enhancement was decided last week, it was effective from April and already two members’ families have benefited.
Pensioners are only eligible to join within six months of availing of the first pension.
With the benefit enhancement, the monthly deduction will be increased from Nu 250 to Nu 270 with effect from July 1.
An NPPF official said that the increase was to ensure the sustainability of the scheme and to finance possible activities of scheme. “It is a one-time benefit. It was also kept to meet expenses for administering the scheme.”
Press release from NPPF stated that as people ages, they are concerned for their families and worry about the burden they would cause them.
“It is hoped that such an arrangement will give pensioners who join the scheme some comfort to know that the additional monetary benefit will be there to reduce burden on the family,” the release stated.
Currently, there are about 6,500 pensioners in the country. Lotedh scheme has only about 1,033 members currently. It started with about 53 members.
A beneficiary of the scheme, Rinzin Wangmo, said that the amount came in handy when her husband who was a pensioner passed away.
About 19 families benefited from the scheme since its commencement.