Citizen Investment Trust and Tamakoshi Rural Municipality Launch Joint Pension Scheme for Rural Workers

In a significant stride towards bolstering social security and financial inclusion in rural Nepal, the Citizen Investment Trust (CIT) and Tamakoshi Rural Municipality in Dolakha have formally entered into a Memorandum of Understanding (MoU) to implement a comprehensive Citizen Pension Scheme. This landmark agreement, signed on Thursday by Ms. Shobha Shrestha Subedi, Acting Executive Director of CIT, and Mr. Pron Pratap K.C., Chairman of the Rural Municipality, marks a pivotal moment in extending structured retirement benefits to the local workforce.

The newly established scheme is designed with a collaborative contribution model, aiming to make it accessible and sustainable for participating workers. Under the terms of the agreement, the Tamakoshi Rural Municipality will contribute NPR 500 monthly from its dedicated Workers' Welfare Fund for each participant. This contribution will be matched by an equal monthly contribution of NPR 500 from the participating worker, culminating in a total monthly deposit of NPR 1,000 into their individual pension accounts. This dual contribution mechanism not only eases the financial burden on individual workers but also underscores the municipality's commitment to the welfare of its labor force.

To ensure the smooth and transparent operation of the scheme, the Citizen Investment Trust will provide all necessary Know Your Customer (KYC) forms and personal details cards free of charge. This initiative by CIT streamlines the enrollment process, removing potential barriers for rural participants. Concurrently, the Tamakoshi Rural Municipality will bear the crucial responsibility of maintaining updated records of all participating workers and their individual account details, ensuring accuracy and accessibility of information throughout the scheme's lifecycle.

Participants in the Citizen Pension Scheme will become eligible to receive pension benefits upon reaching 60 years of age, in strict accordance with the Citizen Pension Scheme Operating Procedure, 2076. This provision offers a vital safety net, ensuring a stable income stream for workers in their golden years, thereby mitigating financial vulnerabilities often faced by the elderly in rural areas.

Furthermore, the scheme incorporates robust provisions for survivor benefits. In the unfortunate event of a participant's death or disappearance while receiving pension benefits, their spouse will be entitled to receive lifelong pension payments equivalent to what the participant was receiving, as per prevailing regulations. Should both the participant and their spouse pass away, the accumulated savings in the account will be disbursed to their nearest legal heir, ensuring that the financial contributions made are not lost but rather passed on to support their families.

Adding a layer of flexibility, the scheme also allows participants to avail a loan facility. After completing five years of participation, workers can borrow up to 80% of their accumulated funds, provided they have a recommendation from the Rural Municipality. This feature offers a crucial financial lifeline, enabling participants to address urgent financial needs without fully withdrawing from their long-term savings plan. This innovative blend of long-term security and short-term liquidity makes the scheme particularly attractive and practical for the rural populace.

This partnership between CIT and Tamakoshi Rural Municipality is a commendable example of how national financial institutions and local governance bodies can collaborate to foster economic stability and social welfare at the grassroots level. It represents a significant step towards achieving broader financial inclusion and strengthening the social security framework in Nepal, potentially serving as a blueprint for similar initiatives across other municipalities.