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Investment Overview

In line with the present financial market structure of Bhutan and the experiences of the other pension funds in the region the Royal Government approved the Investment Mandate of the National Pension and Provident Fund vide Executive Order No COM/03/02/787 dated April 8, 2002. The salient excerpts of the order pertaining to the investment mandate are enumerated as under:
The National Pension Board shall be responsible for deciding as to the type of financial products in which member contributions are invested so that the viability and long term sustainability of the pension plan is assured, provided that investments shall be limited to the following:
(a)Cash and Cash products;
(b)Securities issued by the Royal Government, or the Royal Monetary Authority of Bhutan;
(c)Securities and other evidence of indebtedness listed on the Royal Securities Exchange of Bhutan.
(d)Shares of companies that are listed on the Royal Securities Exchange of Bhutan.
(e)Construct, acquire and dispose residential housing and commercial complexes acquisition of building sites and lands for promotion of real estate development.
Subject to terms and a condition as may be prescribed by the Board, the NPPF may grant loans and advances to:
i.The Royal Government;
ii.Institutions, agencies and Government projects;
iii. Public and Joint Sector Corporations;
iv.Public Limited Companies incorporated under the Companies Act of Bhutan; and
v.Any of its current members for the purchase, construction or repair of residential house against the security of the house and/ or his/her accumulated provident fund contributions. Subject to the approval of the Royal Government, and on such terms and conditions as deemed fit by the Board, the NPPF may make investments outside Bhutan. For this purpose it may engage the services of a professional investment managers and the Board shall be responsible for drawing up the guidelines for such investments, and for monitoring and evaluating the performance of the manager.”