Monday, June 3, 2013

Social Security Fund seeks government approval to start four schemes

Social Security Fund has asked the government approval to launch four social security schemes for formal sector workers from next fiscal year.
The Fund has submitted its report to Ministry for Labour and Employment suggesting four schemes — sickness, maternity, accident and medical — for the workers.
"We have proposed four schemes but it’s up to the government to decide," said executive director at the fund Kebal Prasad Bhandari.
The fund is also planning pension plan in couple of years.
According to the consultant of the fund, Ek Bahadur KC, the schemes seemed feasible with the contribution of one per cent of the workers only and have not included contribution from employers and the government.
Delay in enforcement of Social Security Fund Act has, however, disturbed operation of the fund.
Employers have not contributed in the fund due to lack of legal framework, he added. "Employers have to contribute 10 per cent in the fund according to the tripartite agreement among the government, trade unions and employers."
Chairperson of the Employers' Council under Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Pashupati Murarka, however, said that they are ready to contribute. "But we are looking for legal framework for it."
The fund will start other schemes in future after the enforcement of Social Security Act, said president of General Federation of Nepalese Trade Unions and the member of the fund Bishnu Risal. "Sickness, maternity, accident and medical benefits are basic schemes according to International Labour Organisation (ILO) Convention 182," he said, adding that the fund has, thus given preference to it.
According to the fund, it has calculated the benefits, according to one per cent social security tax collected from 924,000 formal sector workers. "The total collection in a year is projected at around Rs 1.34 billion, when designing the schemes," said scheme designer Indu Prakash Karki.
"Medical benefit has been designed in twin share — expenditure from worker and the fund — basis, where the fund contributes 80 per cent of medical expanses — which will not cross Rs 20,000 — whereas the remaining amount has to be contributed by the individual.
Similarly, the fund will give Rs 250,000 to Rs 400,000 to the family of the deceased, in case of a worker's death. The amount will differ, according to their contribution that is defined by salary made by the workers to the fund, he added.
The fund has proposed to pay amount equal to 24 months salary in case of permanent disability. It is paid on the monthly basis. In case of partial disability, one will get 50 per cent salary for next 36 months.
Secretary at the ministry Suresh Man Shrestha assured that the ministry will lobby to bring the schemes as soon as possible. "The ministry is planning to start the schemes from the next fiscal year," he added. 

Umbrella Act for Social Security Funds soonKATHMANDU: The government is planning to bring an umbrella Act to regulate all social security funds including Employment Provident Fund (EPF), Citizen Investment Trust (CIT), Social Security Fund (SSF) and Foreign Employment Welfare Fund. "The umbrella Act might come through ordinance soon," said finance secretary Shanta Raj Subedi. "But the government is working on operation modality," he said, adding that bringing all the social security funds under one Act will make the government monitor it effectively.

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