(1) In cases where an application is received pursuant to Section 63 of the Act for approval of the retirement
fund, the Department may give approval subject to Sub-rule (2).
(2) In giving approval pursuant to Sub-rule (1), the Department may so give approval as requiring the retirement fund to abide by the following terms:-
(a) To invest the moneys deposited in the retirement fund or to be obtained by the retirement fund only
in the approved investment, (a1)2 To have the paid up capital shall be at least Ten Million Rupees (one carore),
(a2)3  To have the number of beneficiaries, workers and employees shall be at least One Thousand,
1
Repealed by Second Amendment.
2
Inserted by Second Amendment.
3
Inserted by Second Amendment.
(b) In cases where the retirement fund has to accept retirement contribution from an employer on behalf
of an employee or worker, the management of that fund has to be carried out distinctly from the employer, Provided that, this Clause shall not be applicable in the case of the employee or worker of that fund.
(c) To deposit the retirement contribution into the retirement fund within One month of the debiting where the retirement contribution amount was debited in the month of Ashad, and within Fifteen  days of the debiting in the case of the other months, (d) Retirement payment can be made to the beneficiary of the retirement fund only in the following circumstances:-
(1) In cases where the employee or worker is retired from the service,
(2) In cases where the beneficiary attains the age of Fifty-eight years, or
(3) In cases where the beneficiary dies or becomes disabled permanently.
(e) To have the retirement fund audited by an auditor recognized by the Department of the Auditor
General.
Explanation: For purposes of this Rule, “approved investment” means the investment made as follows:-
(a) The investment made in the citizen investment fund established pursuant to the prevailing laws,
(b) The investment made in the debentures issued by Government of Nepal,
(c) The investment made in the bank operated pursuant to the prevailing banking laws,
(d) The investment made on co-financing with a bank, and
(e) The investment made for beneficiaries except own shareholders.
(3) In cases the approved retirement fund who has obtained an approval from the Department does not abide the terms and conditions as referred to in Sub-rule (2), the Department may cancel the approval
of such fund.
(4) Notwithstanding anything contained in Sub-rules (1), (2) and (3), the provident fund, retirement fund or citizen investment fund being operated under the prevailing laws at the time of commencement of the Act shall be deemed as the approved retirement fund until the 4 last day of Ashad of the year 2060 (16 July 2003).
(5) The fund pursuant to Sub-rule (4) shall obtain an approval from the Department within the period as referred to in Sub-rule (4). In  cases where such retirement fund does not obtain approval within that period, it shall be converted into an unapproved retirement fund after that period.
(6) Notwithstanding anything contained elsewhere in these Rules, the following provisions shall be applicable to the following amounts:-
(a) The amounts included the principal and interest of an employee or worker deposited in the provident
fund or citizen investment fund in the income years preceding the commencement of this Act and the amount for gratuity and accumulated leave accrued until that period shall be exempted from tax, and
(b) The medical treatment expense in a sum not exceeding One Hundred Eighty Thousand Rupees payable to the employee or worker in service at the  time of commencement of this Act, when he/she gets retirement from service as per the rules of the terms and conditions of his/her service, shall not be included in the income of the employee or worker.