Starting from the fiscal year 2025-26, Nepal will implement a contribution-based social security system for newly appointed government employees, replacing the existing pension and gratuity system, the Finance Ministry said on Friday.

In a circular, the ministry instructed all ministries, regulatory bodies, public institutions, boards, committees, and organisations to make necessary arrangements for the system’s implementation.

It also requested them to ensure that the government is not held liable for any obligations resulting from the failure to enforce the contribution-based scheme.

Nepal currently operates under the Contribution-Based Social Security Act, 2017, for employees, workers, and other individuals, and the Pension Fund Act, 2018, for civil servants.