MoLESS tries to allay doubts about SSF
Kathmandu, December 19
Amid rising scepticism among firms about the social security scheme of the government, which has led to low participation in the programme, the government today issued a six-point clarification on different issues related to the scheme.
The Ministry of Labour, Employment and Social Security (MoLESS) has primarily clarified that employers and employees will not lose any social security facilities that they have been getting through other government agencies by switching to the social security fund (SSF).
Among others, banks and financial institutions (BFIs) have been expressing their reservations against registering at SSF citing that the government’s social security scheme does not even ensure benefits to employers and employees being provided by the Employees Provident Fund (EPF) and Citizen Investment Trust (CIT), where they are currently registered.
“Participating in the social security scheme does not affect any facilities that workers and employees are already getting from other government agencies,” the ministry said.
Meanwhile, the ministry has stated that facilities and outcomes of the social security scheme cannot be compared with facilities provided by other similar funds and schemes. “Every fund and programme has different objectives. The contribution-based social security scheme is purely intended to ensure security of workers,” added the ministry.
Unlike other funds, the SSF intends to promote capital formation in the country as well as develop habit among people to save money, reads the ministry’s clarification.
Likewise, the ministry has also clarified that contributors to SSF can get certain amount of loan from SSF. “A guideline on issuing loans from the SSF is being drafted,” as per MoLESS.
So far, 131,577 workers and 11,797 employers have been listed in the social security scheme. Though the government had repeatedly appealed for institutions to join the scheme, participation in the programme has not been very encouraging.
The government had set deadline for private firms to join the SSF by November 30.
However, a majority of firms are yet to join SSF.
Primarily, the bankers have been demanding that the government include insurance policy for dependent family members of the banking staffers. Likewise, they are also seeking flexibility in the sense that they want the mandatory registration of staffers in the SSF be applicable only for those who join the institution after the fund was established.
Under the contribution-based social security scheme, private sector employees have to contribute 11 per cent of their basic salary to the fund, while employers or firms have to chip in another 20 per cent of employees’ basic salary to the fund.