The government has finally registered its long-awaited Federal Civil Service Bill in the House of Representatives, more than a decade after Nepal adopted federalism. 

The proposed law includes some controversial provisions regarding retirement and pensions, raising concerns from the experts. 

The bill was registered on Thursday, a day before the current federal parliament session was scheduled to end. Its registration starts the formal parliamentary process, but debate will not begin immediately. Under House rules, a bill can be presented seven days after registration, making the winter session the earliest opportunity for lawmakers to deliberate on it.

The legislation seeks to consolidate civil service laws and provide a framework for administrative federalism. It covers appointment, promotion, retirement, pensions, inclusion, transfers, provincial and local administration, performance assessment and relations among the three levels of government.

The Rastriya Swatantra Party-led government formed on March 27, had made the introduction of a Civil Service Act a priority. The government’s action plan stated that the Civil Service Bill would be drafted within 45 days. However, the bill reached parliament only six months after the government was formed.

Land Management, Cooperatives, Federal Affairs and General Administration Minister Pratibha Rawal said the bill was finalised after extensive study and consultations. Once enacted, she said, it would provide an important foundation for implementing federalism effectively.

The most contentious provisions in the new bill concern retirement and pensions.

Clause 57 of the bill proposes that civil servants normally retire at 60, raising the existing mandatory retirement age from 58. But as a one-time transitional measure, employees who have reached 55 years of age or completed 30 years of service when the new law comes into force would also retire.

The government retained the controversial provision despite objections from the Public Service Commission. The final bill, however, has been revised to protect pension benefits for employees affected by the early-retirement measure.

Officials involved in finalising the bill say employees who retire before 58 will not lose any pension benefits they would have earned under the existing system. Those retiring after 30 years of service but before 58 may have up to seven additional years counted for pension purposes, depending on their age.

The change addresses a major legal concern raised by the commission, which had warned that forcing employees to retire early or reducing their benefits could conflict with protections under the Civil Service Act, 1993.

Former Public Service Commission chairman Umesh Mainali had questioned the fairness of the 55-year rule. “If someone who turns 55 on the day the Act begins is retired while an employee who is 55 by just one day is allowed to remain until 60, that is not fair at first sight,” he said. “The same law would treat people differently.”

If the proposal introduced in the bill is enacted, most employees in the higher levels of the civil service will be forced to retire. According to sources at the Department of National Personnel Records, most secretaries will retire. Of the 53 serving secretaries, 39 will have to retire under the 55-30 provision. That amounts to more than 73 percent. Similarly, 214 joint secretaries, 635 under-secretaries and 753 section officers will have to retire.

Former chief secretary Lilamani Poudyal also warned against losing large numbers of experienced officials at once. “When experienced and senior employees leave, institutional memory, decision-making and leadership can face a crisis,” he said. “The state needs experienced employees.”

Earlier estimates suggested the transitional rule could affect thousands of employees, including many senior bureaucrats. The government’s broader restructuring drive has also targeted the size of the bureaucracy, with plans to cut around 1,800 posts, including secretary-level positions.

The bill also shortens the tenure of top bureaucrats. The chief secretary would have a two-year tenure, while a secretary would have a three-year tenure. The existing system provides three years for the chief secretary and five years for secretaries.

Another major proposal is ‘lateral entry’ into specialised executive or expert positions. Under Section 10 (14), if suitable human resources are unavailable within the civil service, the government may appoint an outsider for a fixed period after consulting the Public Service Commission. Qualifications, selection methods, performance contracts, service conditions and benefits would be set by the government.

Paudyal criticised the provision, arguing that it could weaken career progression inside the bureaucracy. “Sending experienced employees out and bringing people into executive positions through the back door is wrong,” he said. “It could affect employees’ motivation and career development. There may also be a desire to run administration through advisers and experts who are not properly recognised or accountable under the law.”

Mainali said the commission’s role should be strengthened. “Consultation is not binding. The government does not necessarily have to accept it,” he said. “If the government starts appointing people to executive posts in the name of experts at its own discretion, the career-development chain within the civil service will be broken.”

The bill also seeks to give Nepal’s federal administration a clearer structure. More than a decade after federalism was adopted, the absence of a federal civil service law has slowed administrative restructuring at provincial and local levels.

Former chief secretary Som Lal Subedi, an expert on federalism, said the legislation had been long awaited because administrative federalism could not be fully strengthened without a federal legal framework.

The bill provides for provincial civil services up to the 12th level. The chief secretary of each provincial government would remain an officer of the federal civil service and be deputed by the federal government from among 13th-level officers. Provincial ministry secretaries would be 12th-level positions within the provincial civil service, with service groups and conditions determined under provincial law.

Each province would also have local services, whose formation, service conditions and operation would be governed by provincial legislation.

Recruitment age limits would largely remain unchanged. Nepali citizens aged at least 18 could apply for non-gazetted posts and those aged at least 21 for gazetted posts. Applicants would generally have to be below 35 if male and below 40 if female.

The proposed inclusion system would change significantly. The share of posts filled through open competition reserved for inclusive groups would rise from 45 percent to 49 percent.

Half of that 49 percent pool would be reserved for women, with the women’s quota divided among Khas-Arya, indigenous nationalities, Madhesis, Dalits, Tharus, Muslims, disadvantaged areas and persons with disabilities. The other half would be distributed among inclusive groups, with Indigenous nationalities receiving the largest share, followed by Madhesis and Dalits. The system would be reviewed every 10 years.

Mainali described increasing the women’s share within the inclusion system as a positive aspect of the proposal. Individuals would be allowed to use reservation benefits only once for a non-gazetted post and once for a gazetted post.

The bill also retains a two-year cooling-off period for senior officials. Employees who resign or retire from gazetted special class or first class positions would not be eligible for constitutional, diplomatic or other government appointments for two years. They would also face restrictions on working as employees or consultants on certain projects, particularly those connected with the institution or sector they were involved with during their final year.

The bill introduces several new provisions, including the absence of trade unions for civil servants, the option to reassign employees who were unable to report to provincial or local governments following the adjustment process, inter-provincial transfers, leadership assessment, and leave provisions such as menstrual leave.

Minister Rawal said the provisions are expected to bring a ‘paradigm shift’ in the performance and accountability of the civil service and make it more capable, effective, efficient, responsive and results-oriented.