What is CIT?

• Citizen Investment Trust (CIT) is a government-owned financial institution in Nepal.

• One of its mandates is to administer retirement, gratuity, pension, and provident fund schemes for organizations and individuals.

• Through CIT, organizations can deposit segregated funds corresponding to employee retirement liabilities (gratuity, pension, etc.) into a trusted, regulated body, rather than maintaining those funds in-house.

• Benefits of Using CIT as a Retirement / Pension Scheme (for Employees & Employers)

  For Employees

  1. Security / Trust / Regulatory Oversight
     Because CIT is a government-run or government-affiliated entity, funds held there are perceived as more secure and transparent.

  2. Separation of Liabilities
     Instead of an organization holding retirement liabilities on its balance sheet (and risk mismanagement), being in CIT ensures those funds are properly segregated and professionally managed.

  3. Steady Returns / Interest
     Contributors earn returns on their contributions, which accumulate over time, increasing the ultimate benefit at retirement.

  4. Survivorship / Nominee Benefits
     In many schemes, after the contributor’s death, spouse or nominees get continued benefit. (E.g. Citizen Pension Scheme passes pension to spouse).

  5. Tax Benefits (Deductibility, Exemption)
     Contributions to CIT (and similar retirement funds) are deductible (within limits). Also, when funds are disbursed, favorable tax treatments may apply (see section below).

  6. Flexibility / Predictability
     Depending on scheme design, employees can choose to contribute monthly, quarterly, or in lump sum to meet minimums (especially for Citizen Pension).

  For Employers / Organizations

  1. Liability Management
     Rather than holding pension / gratuity reserves internally (which often carry investment risk, actuarial risk, accounting risk), organizations can transfer those liabilities to CIT for investment and disbursement.

  2. Administrative Ease
     CIT handles fund administration, record-keeping, disbursement, auditing etc., reducing administrative burden on the employing organization.

  3. Regulatory Compliance
     With evolving tax / legal requirements (e.g. new law requiring IRD-approved retirement funds to affiliate with CIT or equivalent), using CIT helps ensure compliance.

  4. Employee Welfare & Retention
     Offering a credible, professionally managed pension / retirement scheme is a benefit that helps attract and retain talent.

  5. Tax Treatment for Employer Contributions
     Employer contributions to approved retirement funds are often tax-deductible for the organization (within limits). (See section “Tax / Legal Aspects” below.)