Enrolment in social security scheme remains low as deadline expires for ValleyThe Contribution Based Social Security Scheme, which was launched amidst excessive fanfare last year in November that invited both praise and criticism, has failed to attract private firms.
The Contribution Based Social Security Scheme, which was launched amidst excessive fanfare last year in November that invited both praise and criticism, has failed to attract private firms.
Since the scheme rolled out nationwide, a total of 1,620 organisations from the formal private sector have registered with the Social Security Fund (SSF).
The registration for organisations operating inside the Valley had started on November 22, although it was formally launched on November 27 by Prime Minister KP Sharma Oli.
The deadline for the registration under the scheme, which aims to protect and secure employees working in the formal sector, ended on February 18 for organisations of three districts: Kathmandu, Lalitpur and Bhaktapur.
According to Ram Bhattarai, spokesperson with the SSF, a total of 1,243 such organisations have registered in Province 3 after enrolment had begun on December 1. Most of the ones who have enroled are from the Kathmandu Valley, said Bhattarai.
“The number of private firms that have registered is lower than expected,” Bhattarai told the Post. “It is likely that it will take more time than expected to bring together private firms under the scheme.”
Under the scheme, the government will provide health, accident and maternity coverage to workers employed in the formal private sector.
To avail of the scheme, both the employer and the employee must register. If everyone registers, an estimated 3.5 million people will benefit from the scheme, under which an amount equivalent to 31 percent of the workers’ basic monthly salary—11 percent deducted from their monthly salary and 20 percent employer’s contribution—will go to the Social Security Fund.
With the completion of registration and regular contribution, private sector workers will be entitled to old-age pension, medical treatment, health protection, maternity coverage, accidents, and disability compensation.
Despite this, people are not signing up for the scheme. Spokesperson Bhattarai believes this is because people are still weighing the pros and cons of registering under the scheme, leading them to take more time.
“Small-level firms might have been reluctant to register under the scheme fearing financial burden. Likewise, employees earning big amount might be hesitant to enrol under the scheme thinking they would have to contribute a big share of their earning to the scheme,” added Bhattarai.
Bringing the entirety of the private sector under the scheme looks like a daunting task, as nearly 900,000 factories, business establishments and service providers are operating in Nepal, according to a preliminary report of the National Economic Census 2018.
The Social Security Fund is planning to extend its previous deadline to give people more time to register. As per existing laws, all formal private sectors must register to ensure their workers. Failing to do so will deprive them of government services.
However, spokesperson Bhattarai also admitted that the authority could not do much to encourage private firms to join the scheme.
“It started with so much excitement, but it pacified as we could not go ahead with required publicity and awareness to ask them to join the scheme. However, we have continued visiting organisations and companies asking them to register,” added Bhattarai.
The nationwide deadline for registration under the scheme will end on April 28 this year.