The foundation of formal retirement income security was initiated in 1962 with a gratuity scheme followed by Government Employees Provident Fund (GEPF) in 1976 that covered all civil servants, corporate employees and members of the Armed Forces.
With modernization and rapid socio-economic development, the retirement scheme required further review. Considering the overall welfare of government employees during old age, His Majesty the Fourth Druk Gyalpo issued a Royal Kasho to the Ministry of Finance (MoF) and Royal Civil Service Commission in 1998 to review the existing retirement benefit schemes. Accordingly, the Government Working Committee (GWC) with technical support from UNDP, Asian Development Bank (ADB) and World Bank, carried out the study that resulted in the separation of GEPF operation from Royal Insurance Corporation of Bhutan Ltd. (RICBL) and the establishment of National Pension and Provident Fund (NPPF).
The NPPF was established as an autonomous agency on March 30, 2000, to manage pension and provident fund schemes of civil servants, employees of state-owned corporations and the Armed Forces. On July 1, 2002, the government formally launched the National Pension and Provident Fund Plan (NPPFP) through an Executive Order to provide income security to members on retirement. The Fund also provides extended benefits for surviving spouse, orphan, disability, dependent parent, and for children under 18 years of age.