KATHMANDU: The government has introduced a new policy requiring companies to be affiliated with the Social Security Fund (SSF) in order to renew their registrations. However, the Fund’s regular programs have not yet succeeded in attracting a large number of employers and workers.
This provision has been included in the government’s policy and program presented in Parliament for the upcoming fiscal year.
To date, around 20,700 employers and nearly 2.3 million contributors have enrolled in the Social Security Fund. Yet, according to the National Industrial Survey 2076 BS, Nepal has more than 60,000 registered industrial establishments, along with countless other businesses in operation.
Despite being implemented since 2075 BS, the SSF has not been able to bring the majority of industrial and commercial entities under its coverage.
As the government enforces stricter measures to ensure companies join the Fund, questions arise regarding the Fund’s performance and initiatives. In this context, Khabarhub spoke with the Executive Director of the Social Security Fund, Kabiraj Adhikari.
Despite years of operation, the Social Security Fund still seems to struggle in attracting both workers and employers. Have you studied the reasons behind this?
I must respectfully disagree with that assessment. Our team is actively conducting outreach and orientations across various sectors—including schools, colleges, and industries.
These sessions are not only aimed at enrolling new participants but also at educating existing members about the benefits they are entitled to.
However, it’s true that we cannot address the informal sector alone. Local governments must also support these efforts. While enrolling formal sector workers is relatively straightforward, enrolling those in the informal economy remains a significant challenge.
That said, we are seeing increased public interest. More people are inquiring about the Fund and its services, and enrollment is gradually rising. This indicates that the Fund is expanding steadily.
Critics argue that the requirement to contribute 31% of a worker’s salary is discouraging enrollment. What is your response?
It’s important to understand the breakdown. Of the total 31%, 20% is contributed by the employer, and only 11% comes from the employee. These contributions go toward various social security benefits, including pensions and health coverage. The model is designed to be equitable and sustainable.
While a sole 31% contribution from the employee would indeed be burdensome, the current cost-sharing arrangement is both balanced and rational. This policy was developed through mutual agreement between stakeholders and is, in that sense, quite scientific.
Regardless of whether someone earns NPR 10,000 or NPR 1 million per month, all contributors are eligible for up to NPR 100,000 in annual medical coverage. This is based on the principle of solidarity, where higher earners support those who earn less.
Many people evaluate their contributions based on the return they expect. Isn’t it likely that a young worker saving until age 60 would see a relatively low return?
The Fund is not a profit-driven venture. Its core principle is social protection, not financial gain. That said, the funds are invested safely, and we are committed to returning those investments with interest.
Each contribution category—whether for health, pension, or insurance—is ring-fenced. For instance, funds collected for health cannot be redirected to pensions and vice versa. We’ve ensured transparency and security in our investment strategies.
In the past three years, after our financial audits, we’ve been able to offer not just the standard 6% interest but have added an additional 0.5%—demonstrating fiscal responsibility and efficiency.
Has there been monitoring of the quality of services provided to contributors, particularly at designated hospitals?
Yes, we have a dedicated grievance redressal mechanism. We regularly monitor service delivery and respond to complaints from contributors.
While I won’t claim there are no complaints—given that more than 2,000 contributors use health services daily—we do our best to address them promptly. When a complaint is filed, we follow up, investigate, and resolve it as quickly as possible.
The new fiscal policy mandates company registration with the Social Security Fund. Was this move made in coordination with your office? What preparations have been made?
Adhikari: Yes, the policy aligns with our long-term goal of bringing all employers and workers under the Fund’s protection. We are in active coordination with the government, and we’ve already begun internal preparations to handle increased enrollment and administration.
The upcoming policy change will be a critical turning point in expanding the Fund’s reach and ensuring broader social security coverage across Nepal.
The government has announced, through the upcoming fiscal year’s budget, that company registration renewal will be contingent on enrollment in the Social Security Fund (SSF). Was this policy introduced in consultation with your office? What preparations has the Fund made to implement this provision?
Yes, the government has taken this issue seriously and made it a priority. The provision requiring companies to join the Social Security Fund when renewing their registration demonstrates a firm policy commitment.
The expansion of the Fund’s coverage is a positive step forward for the future of social security in Nepal, and we are actively working to implement it effectively.
Given the government’s ambitious goals, can the Fund’s current human resources handle the expanded scope? Will additional marketing and outreach be needed?
We are committed to expanding our team as needed. Whether our current workforce can meet the full scale of this challenge is a valid concern, but we’re addressing it step by step. Importantly, we’re not alone in promoting the Fund. Alongside our own employees, various trade unions and social organizations are helping to raise awareness.
Moreover, we have extended our presence beyond the Kathmandu Valley and are promoting the Fund through multiple platforms. That said, we recognize the need to further enhance our institutional capacity to address new challenges that may arise in the future.
There are currently 3–4 different government-managed funds. While the SSF includes unique features such as pensions and health benefits, do you believe it needs to offer more attractive schemes to remain relevant? Are there any such plans in development?
I wouldn’t call it competition—there is no rivalry between government funds. Rather, these institutions complement each other. Each fund has its own distinct role. For instance, the Employees Provident Fund primarily focuses on savings, while the Citizen Investment Trust is largely investment-oriented.
The Social Security Fund, on the other hand, addresses various life risks. We provide support in cases of critical illness, old-age pensions, and more. Our approach is inclusive, and both public and private sector entities are involved.
The government has now decided to bring temporary and contract-based workers who are not covered by traditional pensions into the Social Security Fund. So, each fund is working toward different but equally important goals.
Is the Fund currently operating independently, or does it still rely on government funding?
The Fund is financially sound and operates independently for the most part. The government only stepped in briefly during the COVID-19 crisis, offering support for about two months. Beyond that, we have managed our operations through our own investments and resources.
Can you elaborate on the Fund’s investment strategy, particularly in terms of diversification and security?
Our investment strategy is focused on both security and responsible diversification. We’ve allocated resources into fixed deposits, debentures, and government treasury bills—sectors we consider to be low-risk. The law also allows us to invest in broader projects, so we assess those opportunities carefully.
In addition, we offer special loan products, including home loans, to contributors. These are also part of our investment portfolio and help ensure productive utilization of funds.
As companies are now being mandated to join, is the Fund planning any new schemes to attract more employers and workers?
Our focus is not on launching a variety of schemes for the sake of novelty; rather, it is on ensuring meaningful and reliable social protection. Where needed, we will introduce targeted assistance, especially to help contributors navigate the system.
But ultimately, policy improvements must come through consultation with stakeholders. Social security is still a relatively new concept in Nepal. Understandably, people may take time to embrace this cultural shift, but we are confident that both the market and society will adapt. Other countries have gone through similar transitions.
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