NATIONAL PENSION & PROVIDENT FUND
~ Presented by,Tenzin Lhaden & Tshering Lham
Presentation Outline
 Introduction
 Objectives
 Operational Functions
 Services & Products offered
Brief Background
 Established in March 2000
 NPPF was launched in July 2002
 NPPFP covers about 40,222
Objectives
(a) increase members’ welfare by providing;
 Post service retirement benefit
 Social Support to surviving families
 Establish mechanisms & develop systems for
saving plans
 Housing facilities
(b) to maintain long-term financial viability
Operational Functions
 Registration of Members
 Collection of Contributions
 Delivery of Pension and Provident Fund Benefits
 Investment of Funds
Services & Products offered
Two Plans of NPPF
Pension
Plan
NPPFP
• Monthly
Income after
retirement
Provident
Fund Plan
• Lump sum
payment on
retirement
Pension Benefits
 Benefits
 Criteria
 Pension benefit formula
 Pension benefit formula
Pension = No of years of service x 40% (avg. of last 24
months basic salary)
-------------------------------------------------------------30
 Benefit claim procedures
1.
2.
3.
4.
5.
6.
7.
Completed application form (PF Refund form)
A copy of Retirement order
A copy of Reliving order
A copy of last pay certificate
A copy of RAA clearance
Completed application for pension benefits
A copy of Marriage certificate
I. CREDIT OPERATIONS
NPPF MEMBER LOAN
Housing Loan
Education Loan
OBJECTIVES OF THE NPPF MEMBER LOAN
MEMBERS HOUSING LOAN
Launched on 1st July 2003
1.




2.
NPPF finance
The construction of building,
Acquisition of the flats,
Repairs and extension of the existing buildings, and
Transfer of loans
The NPPF plays a significant role in the nation building by directing its
investments to areas of socio-economic development like building the
social assets to the members during their working days.
3.
The provision of the grace period for a year to the members is subjected to the
members’ ability to complete the construction of the buildings. During such
period, the EMI repayment is not required but the interest would accrue on the
disbursed loan amount.
4.
The main objective of extending this loan to the members at 10% interest is to
provide affordable credit facilities to the members and to encourage them to
secure their old age shelter while working.
Documents Required – Housing Loan
Application form - NPPF office/www.nppf.org.bt
Ownership Certificate
Building plan duly approved concerned authority
ID copy of the applicant & land owner
Two passport sized photographs
Insurance certificate (existing building)
Estimate of the work to be undertaken
Clearances from the financial institutions
Recent photograph of the construction/building
MC if the property is in the name of the spouse
Departmental undertaking
Letter of guarantee from property owner
MEMBERS EDUCATION LOAN
Launched on 1st March 2004

To encourage and assist the members in
pursuing further education and in
educating their children.

The PF balance of the member serves as
the collateral thereby making this loan
accessible to all the members
irrespective of their owning any
properties or not.

The repayment system of EMI deduction
at source makes it hassle free both for
the NPPF and the members.
Documents Required – Education Loan
Application form - NPPF office/www.nppf.org.bt
ID copy of the applicant & beneficiary
Two passport sized photographs (applicant & beneficiary)
Departmental undertaking
Proof of Admission from the institute/School
In case of land/building mortgage:
Ownership Certificate (in the name of applicant/spouse/close
relative)
Clearances from the financial institutions
Recent photograph of building
MC if the property is in the name of the spouse
Letter of guarantee from property owner
ID copy of land owner
How to Calculate Equated Monthly
Installment?
EMI= Amount X i (1+i)^ⁿ
{ (1+i)^ⁿ-1}
Where:
i= rate of interest e.g. 9%÷12
n=number of months (5 years = 60 months)
Eligibility Criteria for availing loans
Sl.No
Particulars
Education Loan
Housing Loan
1
Eligibility
Should be the member of the
NPPF for a more than one year
Should be the member of the
NPPF for a more than one
year
2
Limit
Minimum Floor-Nu. 15,000.00
70% of the total collateral
(maximum)
Maximum Ceiling Nu.
1,000,000.00
3
Rate of interest
9%
10% for new construction, renovation,
Transfer
4
Terms of
repayment
Max. of 15 years or years of
service left whichever is
earlier, or more then service
period left if the client has
enough PF balance
-
Primary:
Primary:
5. Security
Accumulated PF Balance
Secondary:
Land or concrete structured
building
-
20 years (Urban) plus Grace
Period of 1 year
Service year left (Rural) with a max. of
20 years
Land and Building
Secondary:
Accumulated PF Balance
Status of Non Performing Loan
1.40%
1.20%
1.16%
1.00%
0.80%
0.94%
0.60%
0.40%
0.20%
0.00%
2007-2008
2008-2009
REQUESTS

Show the correct Net pay (problems
with deduction later)

Proper Seal and Signature on the
Departmental Undertaking

EMI deductions to be made as per
the deduction letters

EMI to be remitted on time (5%
Penalty on EMI charged to clients’
a/c)

Continued Support
II. INVESTMENT
OPERATIONS
INVESTMENT BACKGROUND

NPPF receives around Nu. 50 million/month as contributions

The I&C Dept. is entrusted with the duty of investing these funds

Challenging task - earning a sustainable rate of return coupled with very
limited investment avenues

Safety - the most important factor
INVESTMENT OPERATIONS AS OF 31.12.2009
Real Estate
4%
RMA Bills
3%
Short Term Deposits
17%
Short Term Deposits
Long Term Deposits
Member Loans
23%
Long Term Deposits
6%
RGOB
Project Loans
RGOB
18%
Equities
3%
Equities
Member Loans
Project Loans
26%
RMA Bills
Real Estate
Future Plans
NPPF is still looking for investment avenues
Invest more in the projects
Looking at the opportunities to invest in the new banks
Possibility of making further investment in Power sector projects.
Government Treasury Bills.
Thank You