Fund prepares to amend pension scheme
The Social Security
Fund (SSF) has witnessed a sluggish growth in participation of the private
sector employers in the social security of their employees.
About 12,876 employer
are registered with the SSF by Tuesday. The number of companies that reached
the fund in November end last year was 11,669. Likewise, the number of
contributors has reached 178,196 from 128,101 some 11 months earlier. The
started functioning from mid-July last year.
Bagmati State has the
highest number of employers and contributors -- 8,705 and 133,706 respectively.
Likewise, State 1 has 1,860 enterprises and 17,672 contributers. Karnali has
only 131 employers and 447 employees registered with the SSF.
State 2 has 13,180
employees from 518 enterprises registered with the fund, Gandaki 6,887
contributors of 923 companies, Lumbini 5,656 contributors of 923 companies and
Sudurpaschim 646 employees of 145 institutions.
The employees have
contributed Rs. 2.94 billion to the fund so far while the latter has paid for
medical treatment and maternity protection facility to 430 contributors,
accident and disability protection to 34, dependent family protection to 15 and
gratuity to 23 employees.
It has disbursed about
Rs. 11 million for these claims.
Given that about 2.4
million employees and about 450,000 enterprises are in the formal sector, the
number of participation in the social security is still not encouraging.
As per the Economic
Census 2018, there were 922,445 business institutions in Nepal by April 2018
and number of employees stood at 3.4 million. But, half of the enterprises,
especially the cottage and small industries, were not registered with the
government agencies.
However, the SSF said
that the numbers were encouraging as even amidst the COVID-19 pandemic, the registration
of employers and contributors was gradually increasing.
“There is a growth both
in terms of contributors as well as the amount contributed to the fund.
However, the growth was gradual in some months in the past,” said Kapil Mani
Gyawali, Executive Director of the Fund.
“Stakeholders have
requested to amend the provisions of the schemes which will be addressed within
a month,” he added.
The contributors have
been demanding to change the procedures of the pension scheme so that they
could use their money even before its maturity. This scheme absorbs the largest
portion of the contributed amount.
It has 28.33 per cent
share in 31 per cent total contribution.
Gyawali said that the
change was an ongoing process and genuine demands and suggestions of the
stakeholders would be incorporated in the scheme.
As per the policy, the
employer should contribute 20 per cent equal to the salary of their employees
and the latter should deposit 11 per cent from its basic salary. The registered
employee will get the facility of medical treatment, health and maternity
protection, accident and disability protection and dependent family protection,
and pension.
Published in The Rising Nepal daily on 4 November 2020.
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