Participation In Social Security Scheme Sees Slow Growth

By Modnath Dhakal

Kathmandu, Nov. 4: 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 Fund 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 contributors. 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 has 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 trajectory 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 the 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 equal to 20 per cent of the salary of their employees and the latter should deposit 11 per cent from their 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.

– The Rising Nepal

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