Public interest in the 'Citizen Pension Scheme' launched by the Citizen Investment Trust (CIT) has been below expectations. The CIT introduced the scheme in July 2020 with the aim of encouraging the general public to save. The CIT aims to utilize such savings for the country’s economic development while ensuring a secure old age for depositors through the money accumulated during their active working years. However, public participation has not been satisfactory.

The CIT has reported that 6,860 people have joined the pension scheme, which was designed to include Nepali citizens who are not covered by the existing savings programs. The government had introduced the procedure for implementing the plan in 2019.

Parbat Kumar Karki, executive director of the CIT, admitted that the plan has not progressed as expected. He explained that income earners, workers and employees of organizations established under prevailing laws, self-employed individuals, as well as non-resident Nepali citizens and those employed abroad, are eligible to participate in this scheme. However, its expansion has been slower than anticipated.

"Our focus is on the Citizen Pension Scheme," said Karki. "We are running a campaign to promote this plan in coordination with state and local levels," he added.

To encourage savings, the government has provided a tax exemption for employees on amounts up to Rs 500,000. However, this exemption does not apply to the Civil Pension Scheme. Despite repeated requests to the Ministry of Finance for tax exemptions, no action has been taken.

Executive Director Karki emphasized that the government should address this scheme specifically through the budget and clarify the tax ambiguities. A senior official from the Ministry of Finance noted that the omission of the scheme from the current budget was a mistake. "This plan is not outside the government's priorities," said the official. "The issue of taxes is under discussion, and the ambiguity will be resolved soon."

Karki also highlighted that the lack of attraction to the scheme is partly because the scheme is new, with many citizens unaware of its benefits. To address this, the CIT is planning an extensive awareness campaign. He reiterated that the Citizen Pension Scheme is open to all citizens, and no prior affiliation is required to participate. "Anyone can join at any time," he said, "And we will ensure it reaches the wider population."

According to the scheme's procedure, participants can deposit a minimum of Rs 500 per month and up to Rs 10,000, depending on their earning capacity. Deposits can be made monthly, semi-annually, or annually. Fund officials stated that monthly contributions must be at least Rs 500.

To receive the pension, participants must contribute for at least 15 years and reach the age of 60. Alternatively, participants can withdraw their savings as a lump sum if they have not met the 15-year contribution period, or opt for monthly pension payments.

Participants currently engaged in other plans of the CIT can also join this scheme. The procedure specifies that the pension amount will be calculated by dividing the total accumulated amount by 170, combining the participant’s savings, interest, and returns from fund investments, to provide monthly payments for life.

If a depositor loses his/her source of income, becomes disabled, or migrates to another country, they can exit the scheme. In such cases, participants must have completed at least two years of regular contributions. According to Uddhav Silwal, the CIT’s information officer, in such scenarios, the principal amount deposited in the depositor’s name will be paid out in one lump sum.