NATIONAL PENSION PROVIDENT FUND Presented by Tenzin Lhaden
NATIONAL PENSION & PROVIDENT FUND ~ Presented by, Tenzin Lhaden & Tshering Lham
Presentation Outline Ø Introduction Ø Objectives Ø Operational Functions Ø Services & Products offered
Brief Background Ø Established in March 2000 Ø NPPF was launched in July 2002 Ø NPPFP covers about 40, 222
Objectives (a) increase members’ welfare by providing; v Post service retirement benefit v Social Support to surviving families v Establish mechanisms & develop systems for saving plans v Housing facilities (b) to maintain long-term financial viability
Operational Functions v Registration of Members v Collection of Contributions v Delivery of Pension and Provident Fund Benefits v 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 v Criteria v Pension benefit formula
v Pension benefit formula Pension = No of years of service x 40% (avg. of last 24 months basic salary) -------------------------------30 v 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 1 st July 2003 1. NPPF finance v v The construction of building, Acquisition of the flats, Repairs and extension of the existing buildings, and Transfer of loans 2. investments to areas of socio-economic development like building the social assets to the members during their working days.
3. 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 ØApplication form - NPPF office/www. nppf. org. bt ØOwnership Certificate ØBuilding plan duly approved concerned authority ØID copy of the applicant & land owner ØTwo passport sized photographs ØInsurance certificate (existing building) ØEstimate of the work to be undertaken ØClearances from the financial institutions ØRecent photograph of the construction/building ØMC if the property is in the name of the spouse ØDepartmental undertaking ØLetter of guarantee from property owner
MEMBERS EDUCATION LOAN Launched on 1 st March 2004 Ø To encourage and assist the members in pursuing further education and in educating their children. Ø 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. Ø The repayment system of EMI deduction at source makes it hassle free both for the NPPF and the members.
Documents Required – Education Loan ØApplication form - NPPF office/www. nppf. org. bt ØID copy of the applicant & beneficiary ØTwo passport sized photographs (applicant & beneficiary) ØDepartmental undertaking ØProof of Admission from the institute/School ØIn case of land/building mortgage: v. Ownership Certificate (in the name of applicant/spouse/close relative) v. Clearances from the financial institutions v. Recent photograph of building v. MC if the property is in the name of the spouse v. Letter of guarantee from property owner v. 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 2 Limit Minimum Floor-Nu. 15, 000. 00 70% of the total collateral (maximum) Maximum Ceiling Nu. 1, 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 - 5. Security Primary: Accumulated PF Balance 20 years (Urban) plus Grace Period of 1 year Service year left (Rural) with a max. of 20 years Land Building Secondary: Accumulated PF Balance Land or concrete structured building
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 -2009
REQUESTS Ø Show the correct Net pay (problems with deduction later) Ø Proper Seal and Signature on the Departmental Undertaking Ø EMI deductions to be made as per the deduction letters Ø EMI to be remitted on time (5% Penalty on EMI charged to clients’ a/c) Ø 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 RMA Bills 4% 2% Short Term Deposits 17% Long Term Deposits 6% Member Loans 23% RGOB 18% Equities 3% Short Term Deposits Long Term Deposits RGOB Project Loans Equities Member Loans Project Loans 26% RMA Bills Real Estate
Future Plans v. NPPF is still looking for investment avenues v. Invest more in the projects v. Looking at the opportunities to invest in the new banks v. Possibility of making further investment in Power sector projects. v. Government Treasury Bills.
Thank You “ASSURING YOU THE BEST OF OUR SERVICES ALWAYS!”
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