Social Security Fund asks employers to join scheme, luring those concerned with revised pension plans

KATHMANDU : The Social Security Fund (SSF) has asked all the employers including those of the private sector to get registered at the Fund by this fiscal year end.

Issuing a public notice recently, the SSF has urged the organizations concerned to abide by the government law. As of now, a large number of private organizations in particular are reluctant to join the SSF, terming a number of provisions in the SSF law as ‘impractical.’

The contribution-based Social Security Scheme is one of the most ambitious programs launched by the government two years ago. Workers from the private sector are offered financial security under four categories of support – medical treatment, health protection and maternity plan; accidents and disability plan; dependent family plan; and old-age security plan.

Many private companies had been reluctant to join this program citing double taxation and 60 years of age bar to receive pensions. Likewise, there had also been complaints that the existing law discriminates between public and private sector employees.

According to SSF records, as of January end, over 13,000 employers and 187,000 employees have been registered in the scheme net. It has collected more than Rs 3.81 billion from around 84,000 contributors.

Citing the low participation of the private sector, the government revised the SSF working guideline 2019 two months ago. In the new rule, the government has reduced the minimum contribution amount in the pension plan to 20 percent from 28.33 percent of the basic salary. The government has now allowed including this amount also in the pension scheme.

The government has also revised the proportion of the collected fund of individuals to be provided in monthly pension amounts. In the new rule, the total contribution amount of an individual will be divided by 160 weight value to fix the amount in monthly pension. Earlier, the weight value was fixed at 180 to calculate the monthly pension amount. It means a pensioner will receive more cash in social security on a monthly basis after s/he retires at the age of 60.