Nearly 3.5 million formal private sector workers will be covered by the contribution-based Social Security Scheme, the government’s move towards protecting workers nationwide and promising them a comprehensive welfare package.  

According to the scheme, every month, tens of thousands of private sector workers and their employers will be contributing to a common fund—Social Security Fund— which will help needy workers get financial support. 

Launching the scheme in the Capital on Tuesday, Prime Minister KP Sharma Oli

said the scheme marks the beginning of a new era in the country.

Under the scheme, workers will be entitled to old age pension, medical treatment, health protection, maternity coverage, accidents, and disability compensation.

“After the implementation of the scheme, workers will not have to worry about their old age as the contribution from their productive years will benefit them in the later part of their life,” said PM Oli.

As per the Social Security Scheme’s operational directives, retirement pension will be provided to workers aged over 60 who have contributed to the fund for 15 years.    

An amount equivalent to 31 percent of workers’ basic monthly salary—11 percent deducted from worker’s monthly salary and 20 percent employer’s contribution— will be going to the social security fund that currently has Rs19.33 billion.

Of the 31 percent, 1 percent will go for medical treatment, health protection and maternity scheme; 1.40 percent for accidents and disability plan; 0.27 percent for dependent family plan; and 28.33 percent for pension or old-age security scheme.

Labour, Employment and Social Security Minister Gokarna Bista said the newly rolled out scheme will end all the financial insecurity for the present and uncertainty for the future faced by private sector workers.

“Workers can lead a dignified and secure life under this scheme,” said Bista, adding that the facilities for workers will ultimately encourage youths to take jobs in the country and stop the massive foreign migration for jobs.

Private sector and labour rights organisations have lauded the implementation of the social security scheme as a much needed step towards dignifying the labour sector.

Bhawani Rana, president of the Federation of Nepalese Chambers of Commerce and Industry, said, “Workers’ future will be secure and this will promote dignified labour practices in the country. This move will prove to be a landmark in protecting the labour’s rights and safety,” said Rana.

Along with workers, their spouse, children and parents can also access the facilities in case of the contributor’s death. Deceased worker’s spouse will get a monthly pension equivalent to 60 percent of the worker’s basic salary for lifetime. If a worker dies after paying the premium, the children will get 40 percent of the parent’s monthly salary till the age of 18 as an educational assistance. If the deceased worker does not have a spouse or children, the parents will get 60 percent of the worker’s monthly salary until they survive.

Furthermore, the government’s move has also been widely appreciated by the private sectors.

Hari Bhakta Sharma, president of the Confederation of Nepalese Industries, said happier and satisfied workers will raise their products and services at par with the international standard.

However, Chandra Prasad Dhakal, president of Employers’ Council, urged the government to utilise the social security fund effectively by investing in the country’s development.