December 2: Even after completion of the extended deadline, private institutions have shown lack of interest to join the government’s Social Security Fund.
Around 12,000 employers have so far listed themselves for the contributions-based scheme of the government, which provides pension to private sector employees after retirement.
The government had implemented the ambitious scheme from the beginning of the current fiscal year but only around 8000 employers had listed their companies in the scheme as of mid-October 2019. The government then extended the deadline by one month on October 24, which saw 4000 new employers getting listed in the scheme.
The government has made it mandatory for the private sector to join the contribution-based social security scheme. However, majority of the private institutions are reluctant to join the scheme as the return is not as attractive as that of the Employee Provident Fund (EPF) and the Citizens Investment Trust (CIT). The workers are hesitant to contribute to the fund because they cannot get any benefit from the scheme or utilize any amount during emergency until they retire.
The government has realized the need for policy level reforms due to the discouraging participation of the private sector in the scheme.
In this context, the Social Security Fund had prepared a work procedure to provide loans to the contributors under 12 different heads including home loan, educational loan among others.
The Social Security Fund has forwarded its working procedure to the cabinet for approval. Once it gets approved, the contributors can benefit from home and educational loans. Workers are currently benefitting from such loans from the Employee Provident Fund. Officials at the fund believe that the employee will be attracted toward this scheme once the working procedure gets approved.
The scheme offers financial security in case of health and maternity emergency, medical expenses, accidents , dependent family members and old-age allowance among others.
However, the Executive Director of the Social Security Fund Kapil Mani Gyawali said the government has not taken any decision whether to extend the deadline once again or take action against those not complying with the mandatory provision.