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My Internship at NPPF

The National Pension and Provident Fund (NPPF) has been a vital part of financial security for many, including me. My time with NPPF was not just professional but also deeply personal, giving me insights into its role in ensuring economic stability and fostering a culture of saving. The term NPPF from my understanding is helping people retire with dignity and financial independence. During my time here, I saw its operations, met its dedicated team, and witnessed the positive impact it had on people’s lives.   We understood that NPPF mainly focuses on providing both pensions and provident funds. Pensions ensure long-term security after retirement, while provident funds act as savings for life’s critical moments. These dual roles show how NPPF supports both immediate and future financial needs. My time there helped me understand how these systems are interlinked to provide holistic financial support.  Working with NPPF was inspiring. Interacting with members showed me how much the institution’s efforts mattered. Simplifying processes, improving digital tools, and conducting outreach programs made a big difference to members. Hearing their gratitude was a reminder of the importance of NPPF’s mission (Managing retirement schemes, which are inclusive, adequate, innovative and sustainable and managing funds through prudent investment to enhance sustainability of the scheme).  NPPF’s operations are well-organized and efficient. Its investment strategies balance risks and returns, with funds managed in equities, bonds, and real estate. Governance is strong, with transparent decision-making and stakeholder involvement ensuring the system works effectively. Some of the challenges that it faces are like sustaining funds as people live longer and ensuring more people understand its benefits. It addresses these through initiatives like linking retirement age to life expectancy and using technology for better outreach. Flexible contribution options for non-traditional workers also help make the system more inclusive.  I learned the importance of balancing immediate needs with long-term goals in financial management and also that the age for getting a pension for the government employees has been increased by up to 23 years which is an increase of 3 years compared to the previous years. The teamwork and dedication I experienced at NPPF taught me the value of collaboration and transparency. These lessons continue to guide me in my personal and professional life.  My internship days in NPPF were meaningful and rewarding. The institution’s commitment to helping people retire with dignity is inspiring. Looking back, I am grateful for the opportunity to be part of such an impactful organization and looking forward to work in the organization in the near future. It has left a lasting impression on me, showing the power of collective effort and the importance of social security systems. Tenzin Wangmo Final Year Student at Sherubtse College.

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How NPPF Secures Your Financial Future Through Prudent Fund Management

When it comes to securing your financial future, we take our role seriously. Entrusted with the fiduciary responsibility of managing and investing funds prudently, NPPF not only ensures the promised retirement benefits for its members but also contributes significantly to the our country’s economic development. Let’s take a closer look at how NPPF manages your funds and the benefits it brings to members. Prudent Fund Management: The Key to Sustainability The funds accumulated through Monthly Provident Fund Contribution by NPPF are invested in a diversified portfolio of asset classes, including: Equities: Shares in companies that offer potential for long-term growth. Loans and Bonds: Loans to members and corporate bodies, and fixed-income securities that provide stable returns. Deposits with Banks: Low-risk investment options to ensure liquidity. Real Estate: Properties that generate rental income and appreciate in value over time. This diversified investment strategy ensures that the fund remains sustainable while generating competitive returns for members. By spreading investments across various sectors, NPPF minimises risk and maximises opportunities for growth. The Role of Loans in NPPF Investments Due to limited investment avenues in Bhutan’s local market, loans to members and corporate bodies form a major portion of NPPF’s investment portfolio. These loans not only serve as a secure investment avenue for the fund but also provide financial support to members for purposes such as housing, education, and personal needs. The Power of Compound Returns One of the most significant benefits of being an NPPF member is the ability to earn compound returns on your contributions. Here’s how it works: Imagine you have Nu. 100 in your provident fund account. If NPPF credits an annual return of 8%, your balance at the end of the year becomes Nu. 108 (Nu. 100 + Nu. 8). The following year, the 8% return is calculated on Nu. 108, not just Nu. 100. This process continues year after year, creating a snowball effect that significantly grows your savings over time. This compounding effect is a unique feature of NPPF’s fund management, offering returns that are not available in standard banking products. Ensuring Members’ Financial Security The primary objective of NPPF’s investment function is to ensure that accumulated funds are managed efficiently to generate sustainable returns. These returns are then credited annually to members’ accounts, directly contributing to their financial security during retirement. By adhering to a robust investment policy and focusing on diversification, NPPF ensures that members’ contributions are not only safe but also working hard to grow their wealth. Why Prudent Management Matters Effective fund management isn’t just about generating returns; it’s about ensuring long-term sustainability. The retirement benefits promised by NPPF are only possible because of careful planning and investment strategies that balance growth with risk management. For members, this means peace of mind knowing that their contributions are being managed by professionals with a clear mandate: to secure their financial future. A Brighter Financial Future Awaits The National Pension and Provident Fund is more than just a retirement savings institution; it’s a key pillar of Bhutan’s economic stability. By investing in diverse asset classes and focusing on sustainable growth, NPPF ensures that its members reap the benefits of their hard-earned contributions while supporting the nation’s development. Whether you’re just starting your career or nearing retirement, your contributions to NPPF are not only securing your future but also helping build a stronger Bhutan. Posted by Tashi Gyaltshen Wangchuk (Media and Communications Officer, NPPF)

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Why People Don’t Think About Retirement: A Bhutanese Perspective

Retirement may seem like a distant milestone, tucked away in the far-off future, and for many, it’s not a priority in the present. In Bhutan, as in other parts of the world, the idea of retirement planning often takes a backseat to immediate financial concerns and cultural norms. But why do people tend to overlook this crucial aspect of life? Here’s a closer look at some reasons why retirement planning often gets neglected in Bhutan, and why it’s time to start changing that mindset. 1. Cultural Values and Family Support In Bhutanese culture, strong familial bonds play a significant role in shaping financial priorities. Traditionally, children are expected to take care of their parents in old age. This intergenerational support system has been a cornerstone of Bhutanese society, reducing the perceived need for personal retirement planning. However, as modernisation and urbanisation take hold, traditional family structures are evolving. Young adults are moving to cities, family sizes are shrinking, and the costs of living are rising. Relying solely on family support might no longer be enough, highlighting the importance of individual financial preparation for retirement. 2. “Too Early to Think About It” Mentality Retirement often feels like a faraway chapter, especially for young professionals. In the early years of one’s career, priorities tend to centre around immediate needs like education loans, housing, or starting a family. Planning for retirement feels less urgent compared to these pressing financial goals. This mindset, however, misses a critical point: the earlier you start saving for retirement, the greater the benefits of compound interest. Every year you delay could mean losing out on significant growth in your retirement fund. 3. The “Live for Today” Philosophy Bhutan’s focus on Gross National Happiness emphasises living in the present and valuing experiences over material wealth. While this philosophy contributes to overall well-being, it can sometimes lead to an underestimation of future financial needs. The challenge is to strike a balance: enjoying the present while ensuring financial security for the future. Planning for retirement doesn’t mean sacrificing today’s happiness; it’s about creating peace of mind for tomorrow. 4. Unrealistic Expectations About Income in Retirement Many people assume their expenses will decrease significantly after retirement, but this isn’t always the case. Healthcare costs, for instance, tend to rise as people age. Moreover, retirees often aspire to travel, pursue hobbies, or support grandchildren, all of which require financial resources. Without proper planning, the gap between expectations and reality can lead to financial stress in retirement. Changing the Mindset While these reasons explain why retirement planning is often overlooked, it’s never too late to change the narrative. Here’s how Bhutanese individuals can start prioritising their future: Educate Yourself: Learn about Bhutan’s pension and provident fund systems. Understand your contributions, benefits, and what additional savings might be needed. Start Early: Even small contributions to a retirement fund can grow significantly over time, thanks to compound interest. Explore Additional Savings Plans: Consider options like the other investment vehicles to supplement your pension. Break the Taboo: Talk openly about retirement planning with your family, friends and colleagues. The more it’s discussed, the more normalised it becomes. Posted by Tashi Gyaltshen Wangchuk, (Media and Communications Officer, NPPF)

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A RECENT PENSIONER

This is the story of Ms. Diki Wangmo, a recent pensioner. She is the first batch of GNM and has served in many organizations in the line of health. She is currently working as the Dean of Apollo Nursing Institute in Thimphu. Learning and contributing do not stop after retirement for this pensioner. Watch the full video here: https://www.youtube.com/watch?v=BdhXKao98kY&t=102s

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