Kathmandu, December 4: With the private firms showing reluctance to join the social security fund (SSF), the government is preparing to extend its deadline.
Initially, the deadline of October 17, 2019, had been set for such firms to register themselves and all of their employees at the SSF. But, due to lackadaisical response, the government had extended the deadline for registration by three months to November-end.
As of mid-October, only around 8000 employers had listed their companies in the scheme which saw the registration of 4000 additional employers till the end of November. The SSF has collected Rs 181 million contributions to the fund.
The government has made it mandatory for the private sector to join the contribution-based social security scheme. But a majority of the private institutions are reluctant to do it due to certain reasons. The first reason is that the return of this scheme is not as attractive as that of the Employee Provident Fund (EPF) and the Citizens Investment Trust (CIT). Similarly, another reason is that the banks and corporate houses think that some provisions of the scheme are lopsided.
The government is said to be holding internal discussions to extend the deadline and encourage the private sector to register at the SSF
In a bid to ensure more private participation, the Social Security Fund has prepared and forwarded a work procedure to the cabinet for approval. One it is approved, the Fund will provide loans to the contributors under 12 different heads, including home loans and educational loans.
Under the contribution-based Social Security Scheme, private sector employees are required to contribute 11 percent of their basic salary to the fund, while employers or firms need to contribute another 20 percent of the employees’ basic salary to the fund.
Of the total fund collected, SSF will allocate 3.22 percent for medical treatment, health and maternity security and 4.52 percent for accident and disability security. It will allow 0.87 percent for dependent family security and 91.39 percent for old age security.
