Debunking the Social Security Fund of Nepal

The redundant Section 57 of SSF

दफा ५७: सामाजिक सुरक्षा स्वोऐच्छिक हुने: यस ऐन बमोजिम सामाजिक सुरक्षा अन्तर्गत प्राप्त हुने कुनै सुबिधा कसैले लिन नचाहेमा वा प्राप्त सुविधा छोड्न चाहेमा स्वइच्छिक रुपमा त्यस्तो सुविधा नलिन वा छाड्न सक्नेछ । 

Let’s say, I don’t want to be registered in SSF in the first place, but I can’t opt not to. But the SSF wants you to know if I don’t want to receive the benefits under it, that I can. If I don’t have the option to contribute it in the first place, why let us know this? 

Due to lack of participation from the employers in Social Security Fund, the timeline deadline for registration has been extended for several times now.

The first timeline for registration was as follows:
♦ Province Number 1: Within March 14, 2019 (2075.11.30)
♦ Province Number 2: Within March 28, 2019 (2075.12.14)
♦ Province Number 3 (Kathmandu Valley): Within February 17, 2019 (2075.11.05)
♦ Province Number 3 (Other than Kathmandu Valley): Within February 26, 2019 (2075.11.14)
♦ Province Number 4, 5, 6 and 7: Within April 13, 2019 (2075.12.30)
♦ Province Number 4, 5, 6 and 7: Within April 13, 2019 (2075.12.30)
Then the timeline was extended till October 17, 2019 (2076.06.30)

Then there were no further extensions. 

Unlimited rights to SSF under Section 17

कोषले आदेश दिन सक्नेः
दफा १७(१): कुनै रोजगारदाता यस ऐन बमोजिम तोकिएको अवधिभित्र कोषमा सूचीकरण नभएमा वा रोजगारदाताले नियुक्त गरेको वा निजसँग रोजगार सम्बन्ध कायम भएको श्रमिकलाई कोषमा सूचीकरण नगरेमा कोषले त्यस्तो रोजगारदातालाई देहाय बमोजिम आदेश दिन सक्नेछ:
(क) तत्काल कोषमा सूचीकरण हुन र आफुले नियुक्त गरेको वा रोजगार सम्बन्ध कायम गरेको श्रमिकलाई कोषमा सूचीकरण गराउन,
(ख) त्यस्तो रोजगारदाता र श्रमिकबीच रोजगार सम्बन्ध कायम भएको मितिदेखिको यस ऐन बमोजिम जम्मा गर्न पर्ने योगदान र दफा ९ बमोजिम लाग्ने व्याज समेत कोषमा दाखिल गर्न, वा
(ग) रोजगारदाता र श्रमिकबीच रोजगार सम्बन्ध समाप्त भइसकेको अवस्था देखिएमा रोजगार सम्बन्ध कायम रहेको अवधिको श्रमिकले यस ऐन बमोजिम पाउनु पर्ने सुविधा बराबरको रकम तोकिएको अवधिभित्र सम्बन्धित श्रमिकलाई उपलब्ध गराउन ।
दफा १७(२): दफा १७(१)(ग) बमोजिम रोजगारदाताले सामाजिक सुरक्षाबापतको रकम श्रमिकलाई उपलब्ध नगराएमा कोषले त्यस्तो रकम असुल उपर गरी सम्बन्धित श्रमिकलाई प्रदान गर्नेछ । 

Let’s say, a company follows its minimum requirement of the Labor Laws and provides the benefits under Labor Act to its employees. Both the employee and employees are well aware to see that the SSF plans are not that beneficial. They both are not interested to enlist in the Social Security Fund. But under Section 17 of the Act, the SSF reserves an unlimited right to impose onto the employer the amount to be compulsorily paid to the employee even when the employee might have already compensated their employee for the minimum requirement of the Labor Act. But why would you want to corner a free economy? Free economy is a tried, tested and successful approach to addressing Social Security Programs. 

On the other hand, can the employer and employee agree to not participate in SSF but instead plan a better retirement plan with better returns? No. It is not allowed under Section 64 of the SSF Act. 
दफा ६४: सामूवहक सौदाबाजीले प्रभाव नपर्ने: यो ऐन वा यस ऐन अन्तर्गत बनेको नियमावलीमा उल्लेख भएको व्यवस्थालाई सामुहिक सौदाबाजीले सम्बन्धी व्यवस्था वा संझौताले प्रभाव पार्ने छैन ।
This is just basic anti free market. Controlling market by regulatory domination. If something is anti-free market, someone is definitely getting unjust advantage. 

If it is a Social Security, why doesn't the GoN contribute as well?

Employees have been paying income tax to the tune of upto 36% on the employment income. And add another 31% contribution to SSF on top of that. It could go well up to 67% burden. Let’s just get real here with GoN. Even Californians don’t pay that huge tax.
I think if you could just scalp us would still be less painful than the torture of paying taxes. And I am being blunt and honest here, Nepalese folks get a whole bunch of almost nothing for the 36% to the GoN. 

I found this question from a concerned employee “म रोजगारकर्ता हुँ । सामाजिक सुरक्षा कोषले दिने सुबिधा मलाई चाईदैन । अब जबर्जस्ति गर्न मिल्छ? बैंक वा बिमा वा लगानी वा दान दिन चाहन्छु। के पाउँदिन्न? मलाई क्यान्सर लाग्दा बचाउने स्किम चहियो कि त रुघा खोकीको औषधि र खुट्टा मर्किदा लाउने प्लास्टर त म आफैं गरिहाल्छु ।”. A very genuine concern. 

अनि सरकारको योगदान पनि हुनपर्ने हैन? सरकारको योगदान नै नभएको सामाजिक सुरक्षा कोष कस्तो सामाजिक सुरक्षा कोष? What is the incentive to join? भोलिको दिनमा जम्मा योगदानको ८-१० प्रतिशत रकम चै बर्ष्यौनी बढाइ-बढाइ धान्न नसक्नु भाको वृद्धा भत्ता तर्फको योजना हो भनेर भन्दिए भने? We definitely need some assurance here. 

Fundamental Right: Right regarding Labor

Clause 34: Right regarding labor:
(1) Every laborer shall have the right to proper work practices.
Explanation: For the purpose of this Article, “laborer” means a worker or laborer who offers physical or mental work for an employer for remuneration.
(2) Every laborer shall have the right to appropriate remuneration, facilities and contribution-based social security.
(3) Every laborer shall have the right to form trade union, participate in it, and organize collective bargaining.

This is the stem of Social Security Fund Act. 

What are the fundamental rights provided by Constitution of Nepal?
16. Right to live with dignity 17. Right to Freedom 18. Right to equality 19. Right to communication 20. Right to Justice 21. Right of victim of crime 22. Right against torture 23. Right against preventive detention 24. Right against untouchability and discrimination 25. Right to property 26. Right to religious freedom 27. Right to information 28. Right to privacy 29. Right against exploitation 30. Right regarding clean environment 31. Right to education 32. Right to language and culture 33. Right to employment 34. Right regarding labor 35. Right to health care 36. Right to food 37. Right to housing 38. Right of women 39. Right of children 40. Right of Dalits 41. Right of senior citizens 42. Right to social justice 43. Right to social security 44. Right of consumers 45. Right against exile 46. Right to constitutional remedy

Looks like you have the right over the whole universe here. Probably is the longest list of fundamental rights in the whole world. But do you have the right to save and utilize your earned income as you please? Apparently No !!  

What is a “right” anyway? What is “fundamental right”? Fundamental rights by Constitution are liberty rights. 
A liberty right or privilege, is a freedom or permission for the right-holder to do something, and there are no obligations on other parties to do or not do anything. For example, if a person has a legal liberty right to free speech, that merely means that it is not legally forbidden for them to speak freely: it does not mean that anyone has to help enable their speech, or to listen to their speech; or even, per se, refrain from stopping them from speaking, though other rights, such as the claim right to be free from assault, may severely limit what others can do to stop them.
This is both normative and positive meaning of liberty right. Can there be any philosophical debate or alternating views to this?

In Nepali, नेपालको संबिधानको धारा ३४ को उपदफा २ अनुसार ”प्रत्येक श्रमिकलाई उचित पारिश्रमिक, सुबिधा तथा योगदानमा आधारित सामाजिक सुरक्षाको हक हुनेछ ।” भनी व्यवस्था गरेको छ । यसको मतलब योगदान गर्ने ले सामाजिक सुरक्षा सुबिधा पाउने र नगर्नेले तेस्तो सुबिधाको लागि दाबि गर्न नपाउने भन्ने मात्रै हो। संविधानको यो व्यवस्थाको जगमा स्थापना भएको सामाजिक सुरक्षा सबै श्रमिकका लागि कसरि अनिवार्य भयो?

संविधानले पढ्न पाउने हक छ भनेर व्यवस्था गरेको अवस्थामा मलाई Science मन पर्दा पर्दै सरकारले Management धेरै राम्रो छ, तैंले Management नै पढ् भन्न पाउँछ? सँविधानले सामाजिक सरुक्षा कोषमा योगदान गर्ने हक छ भन्दा भन्दै अरु कानुनले चाहिँ सामाजिक सुरक्षा कोषमा जानु तेरो कर्तव्य हो, योगदान गरिनस् भने सजाय दिन्छु भन्न पाउँछ? बरु कर बढाए भैगो नि ।

Also disagree with Rule 10 of SSF Rules

योगदानमा आधारित सामाजिक सुरक्षा नियमावली, २०७५
नियम १०: निलम्बन
(१) समितिको सिफारिसमा कोषले देहायको अवस्थामा योगदानकर्ताले पाउने सुविधानिलम्बन गर्नेछः (क) सामाजिक सुरक्षा योजनामा समावेश भएको व्यक्तिको वास्तविक पहिचान हुन नसकेमा त्यस्तो पहिचान नभएसम्म, (ख) अदालत वा न्यायिक निकायले सामाजिक सुरक्षा योजनाको सुविधा भुक्तानी स्थगन गर्न आदेश दिएमा, (ग) नेपाल सरकारले देशमा चरम आर्थिक विश्रृङ्खलता वा अन्य असाधारण अवस्था सृजना भएकोसूचना गरेमा।
(२) उपनियम (१) को खण्ड (ग) बमोजिमको अवस्था विद्यमान नरहेको भनी नेपाल सरकारले सूचना गरेमा समितिको सिफारिसमा कोषले त्यस्तोनिलम्बन फुकुवा गर्नेछ । 

श्रम ऐन, २०७४
दफा १४९: श्रमिकले पहिलो प्राथमिकता पाउने
प्रचलित अन्य कानूनमा जुनसुकै कुरा लेखिएको भए तापनि प्रतिष्ठान बन्द गर्दा वा खारेजी गर्दा श्रमिकलाई भुक्तानी गर्न बाँकी पारिश्रमिक वा अन्य सुविधा पहिलो प्राथमिकताका साथ दिनु पर्नेछ तर दामासाही ऐन लागू हुनेमा सोही बमोजिम हुनेछ । 

Bank and Financial Institutions Act, 2073; Insurance Act 2049 and all other industry specific acts also provides that at the time of liquidation or financial hardship to the company, the first priority of the payment is to the employees of the institution. But when you are a participant of SSF and should such financial crisis befall, the participants may be empty handed in terms of the SSF benefits. 

When the mud hits the fan, some can run but some have to face the fan

If we compare the Civil Service Act, 2049 with Labor Act 2074, the minimum benefits of the PF is similar. Provision of gratuity could be more beneficial in Civil Service if the years of service is higher. But the non-contributory pension amount is definitely an added advantage in Civil Service. Till this date GoN has not published any notice in Gazette regarding the participation of government servants and civil servants in the participation in Contributory Social Security Fund, as per Contribution Based Social Security Act. Naturally, the implementation of SSF to government and civil servants can be anticipated as even greater challenge and will be an interesting observation to be made. 

So basically, if the unprecedented hardships befalls the national economy, as discussed above, SSF may very abandon you to a null savings. On the other hand you will be bearing the cost for the restrictively provided SSF benefits (basically an added tax), and bearing the cost throughout. It is not a pleasant situation to be put in. 

If you are 60-75 years you should not die, you "should not"

Let’s talk about the infamous Pension Sub-Scheme under Old Age Scheme. 20% out of the total 31% amount gets contributed to this scheme. It’s quite important and substantial amount. Let’s discuss the applicability of pension scheme below: 

Pension Scheme  

  • Applicability: This option is applicable for all employees, to the extent of their contribution in Old Age Scheme that are not covered by opting “Retirement Plan Scheme” above. 
    Benefit Amount: As per Section 21 and Section 22 of Directive on Operation of Social Security Schemes 2075, Under pension scheme these three situations may arise:
    • Participant reaches 60 years of age and he has made contribution in the scheme for at least 180 months: The contribution amount accumulated in participant’s account (along with inflation adjustments and bonuses) shall be divided by 160 months, and such amount shall be provided to the participant on monthly basis, for his entire lifetime. If participant dies before receiving pension for at least 15 years, 50% of such pension amount shall be provided to the spouse for his/her entire lifetime, provided that he/she is not a participant of Old Age Scheme and is unemployed.
    • Participant reaches 60 years of age but he has not made contribution for at least 180 months: The participant has two options:
      • The contribution amount accumulated in participant’s account (along with inflation adjustments and bonuses) shall be divided by 160 months, and such amount shall be provided to the participant on monthly basis, for his entire lifetime. If participant dies before receiving pension for at least 180 months, 50% of such pension amount shall be provided to the spouse for his/her entire lifetime, provided that he/she is not a participant of Old Age Scheme and is unemployed and the spouse has not remarried. [Section 24Ga of Operating Procedure of Social Security Scheme, 2075]
      • The contribution amount accumulated in participant’s account (along with inflation adjustments and bonuses) shall be provided in lump sum to him. [Section 22(2) of Operating Procedure of Social Security Scheme, 2075]
    • Participant dies before reaching 60 years of age: The contribution amount accumulated in participant’s account (along with inflation adjustments and bonuses) shall be provided in lump sum to his heir. [Section 21(Kha) of Operating Procedure of Social Security Scheme, 2075]
    • Participant dies between the age of 60 and 75: If participant dies before receiving pension for at least 180 months (i.e. dies between the age of 60 and 75), 50% of such pension amount shall be provided to the spouse for his/her entire lifetime, but provided that he/she is not a participant of Old Age Scheme and is unemployed and the spouse has not remarried. [Section 24Ga of Operating Procedure of Social Security Scheme, 2075] 
    • Participant dies after reaching 75 years of age: Nothing. If you have spouse not eligible for pension plan, or dependent who are not eligible under Dependent Family Scheme, then SSF Scheme will not help you here. 

An important question:
६० देखि ७५ वर्षको उमेरमा म मरे भने मेरो जम्मा गरेको कति योगदान रकम नेपाल सरकार/सामाजिक सुरक्षा कोषले दिंदैन?
यदी ६० देखि ७५ वर्षको उमेरमा म मरे भने यदी (१) मेरो दम्पतिले सामाजिक सुरक्षा कोष अन्तर्गत निवृतिभरण पाउने अवस्था भएमा, वा (२) मेरो दम्पतिको बैकल्पिक रोजगारी भएमा, वा (३) मेरो दम्पतिले अर्को बिहे गरेमा, नेपाल सरकार/सामाजिक सुरक्षा कोषले पुरै १०० प्रतिशत रकम दिंदैन । नत्र ५० प्रतिशत रकम मात्र दिंदैन। 

You want to work? Don't, there is a penalty for that.

Not everyone wants to stay idle and sanitize after your grandchild has pooped in the bath. Not everyone wants to be just a senile cradle-crap-scrapper after the age of 60. But how does the SSF compensate you for that? If you continue working after the age of 60, you will be stripped off from the benefits you could have rightly received from the savings of your deceased spouse. Makes you acutely remember we live in a third world country. Don’t we want people to be successful or keep the active work going even after the age of 60?
It is never too late to be what you might have been. – George Eliot
If you continue working after the age of 60, your deceased spouse’s savings, which could otherwise yours, will be stripped from you, if you participate in SSF.  – Social Security Fund of Nepal

It’s not just that. It gets worse. The modern employment culture, everyone is employed somewhere. Both the couples work. The world is so expensive, all thanks to useless government spending and fake political promises that even to have a basic living all family needs to work. That’s the reality of our time. Everyone is engaged in some form of employment. And Social Security Fund is compulsory for all. So, sadly, everyone will be contributing a part of their income in pension plan of Social Security Funds through their employment. So it’s basic sense that everyone will the the participant of the pension plan under Social Security Scheme. 
And how will the Social Security Fund treat the abiding contributing participants of the fund? They will be denied the savings of their deceased spouse as they are already eligible for the pension plan under Social Security Scheme, which the spouse had no option to opt not to participate in the first place. Talk about how to corner the people’s wealth. Is this a penalty for being employed, for creating national GDP, for being an entrepreneur or just being a overall old age person. What’s the point in having constitutionally given Right to live with dignity and Right to Freedom? Beware to how government slowly strips off your rights. It never is a outright cancellation of fundamental rights, it always is in the form of financial and economic discomfort when you try and exercise your fundamental rights. And it’s not just that. You can’t remarry after 60. Because if you do you will again be denied the savings of your deceased spouse, rightfully yours. 

So what do you do here? Don’t you die or let your spouse die in the age slot of 60-75 years. You can’t die.
६०-७५ वर्षको उमेरमा मरियो भने घाटा छ। 

But if you really want all those savings, you will have to surrender your nationality. It's true.

But, all is well if you leave revoke your nationality. There is no point in talking about the meaning of nationality here as we are not grade 10 students anymore. 

The GoN speaking in Biblical proportion as: 
“My name is SSF. Governments of governments. Look on my SSF Schemes, ye Mighty, and despair!”. And we are in a long term despair looking on the works of SSF and GoN. 

So is it true, you will get your savings back at the time you want, if you can manage to revoke the Nepali nationality? Yes. Why do I feel like SSF is a secret program to deport all the sane minds from Nepal?

सामाजिक सुरक्षा योजना संचालन कार्यविधि, २०७५
दफा २४क: विदेशी नागरिकले रकम फिर्ता लैजान पाउने :
(१) विदेशी नागरिकले रोजगार सम्बन्ध समाप्त भए पछि जुनसुकै समयमा कोषमा रहेको वृद्ध अवस्था सुविधा योजना बमोजिम पाउने रकम एकमुष्ट फिर्ता लैजान सक्नेछ ।
(२) कुनै विदेशी नागरिकको नेपालमा कार्यरत रहदै वा सेवा समाप्त भएपछि रकम फिर्ता लिनु अगाडि मृत्यु भएमा निजले ईच्छाएको व्यक्ति वा हकवालालाई कोषले रकम भुक्तानी गर्नेछ।
(३) कुनै नेपाली नागरिकले नेपालको नागरिकता त्यागी विदेशी नागरिकता लिएकोमा सोको प्रमाण सहित निवेदन दिएमा विदेशी नागरिक सरह कोषले रकम फिर्ता दिनेछ ।
(४) उपदफा (२) मा जुनसुकै कुरा लेखिएको भए तापनि कोषमा योगदान गर्ने कुनै विदेशी नागरिकको मृत्यु भई निजको हकवालाले दफा १५, १६ र १७ बमोजिमको सुविधा पाउने अवस्था भएमा त्यस्तो हकवालाले सो सुविधा वापत एकमुष्ट रकम लिन चाहेमा सात लाख रुपैयाँ सम्म लिन पाउनेछ । 

"The child of Men !" and "The child of God !", you folks have the worst penalty, if you think about it.

Child of Men, let’s assume your parents are participants of the pension plan under Social Security Fund. Unfortunately one of your parent died at 60-75 years of age. What will happen then? This we discussed in “In Nepal, if you are 60-75 years you should not die, you should not” as well.  That was already a well crafted rip off scheme. But what will happen if you have only one parent, no spouse? Or let’s say both your parents died at 60-75 years of age, which although sad, is very probable. Will you get the savings of your parents? Nope, you won’t. What is the incentive here? One could say you could receive the pension under Children Education Sub-Scheme of the Dependent Family Security Scheme (0.27%). But what 60-75 years of parents will have a high school kid? This is ridiculous and unashamedly crafted unfair SSF scheme, rather than a social security scheme. 

To Child of God, those who want to live in solitude and those not blessed with a normal caring family are at disadvantage. Some people want to be alone, they want to wake up, take a bath, put a little cream on their skin, go to work for years and die. Some people just abandon everyone because they don’t have much to worry about their dependents and for whatever reasons. Different people have different stories. Some people just want to earn a little more, spend a little more, take their own financial decisions, take risks, and end up as a beggar or a king, or even die a sad miserable death, as we all do. I think the “right to live with dignity” is the right to go to hell in one’s own way, unless you not are breaking any law to harm others. Can I then decide not to participate in SSF as I have no purpose for it? No. You will still contribute your sweat and blood even when you get/need nothing for it or you have noone to hand it over to. This thing really should be optional. I feel like being cornered into SSF rather than feeling like I am securing my retirement. 

Is this even a contributory fund? If yes, what part? This has consequences.

For the purpose of Labor Act 2074, the gratuity contribution of 8.33% is a non-contributory amount. But with the application of Contribution based Social Security Fund Act 2074, the confusion is whether the contribution corresponding to the 8.33% contribution is contributory or non-contributory under the Contribution based Social Security Fund Act 2074. 

The treatment as to whether it is contributory or non-contributory has huge consequences in tax considerations. The SSF schemes are not exactly comparable to the benefits under Labor Act 2074. The differentiation has been diluted. The amount of Provident Fund that the employee was entitled at the termination of the job under Labor Act 2074 is now a component of Pension Plan Scheme under SSF that is receivable only after attaining 60 years of age. The gratuity amount is only the amount receivable at the point of termination of employment. So the differentiation of the amount based on comparison with the previous Labor Act is now diluted. So it is more likely that the entire SSF program should be viewed as a contributory scheme and subject to taxation at the point of contribution from employer rather than actual disbursement. However due to the lack of clarity from IRD, there are differing views among the tax and legal practitioners in the market. 

As per the tax computation example published by SSF (Page 6, link here), SSF has taken the view that the entire amount is contributory and subject to taxation at the point of contribution. 

The economic double taxation !! And it could be substantial.

I have discussed about this in detail in my another blog: Will I be taxed on my Social Security Benefits? 

The concept the employer’s contribution amount (20%) will be taxed at the point of contribution, as SSF is a contributory fund. The employee will avail the benefit of reducing the contribution from the taxable income to the extent of the contribution. At this point the employee is being taxed in the contribution amount as an employment income. Then the amount gets converted into investment scheme of the employee. Then at the point of disbursement from the SSF, the amount will again be taxed as a return from investment. Despite the nature of the income has changed, the contributor will be economically taxed at two stages on the same amount, which is economic double taxation. When compared to the pension scheme of the Civil Servants under Civil Service Act 2049, the pension to Civil Servants is taxed only at the point of distribution. 

This really has bought confusion as to how the correct treatment should be made based on the nature of the fund and also comparing the treatment with the taxation on Civil Servants. There is a need for clarity here. 

Transition from CIT to SSF

Please refer to the more recent update to this paragraph for newer updates: Transitioning into SSF? – Section 19(4) of Social Security SOP, 2075

Basically everything, the PF under Labor Act, Gratuity under Labor Act, the existing retirement contributions under other Retirement Funds, basically everything is purposed to be transferred into SSF. There are many hurdles however. 

  1. The transfer of the loans and advances from other retirement funds
  2. The taxation on the amount receivable by contributor at the point of transfer
  3. The existing Bachat Yojana of CIT doesn’t allow the payment of the CIT contribution amount before the termination of employment

Section 19(4) of the Directive on Operation of Social Security Schemes 2075 has allowed the employee to receive the amount from their existing retirement plans/accounts. If the current retirement plan/accounts are managed by the employer (i) locally or (ii) any other plan within the control of the employer, the amount can be disbursed to the employee at this stage. However, if such retirement amounts are deposited in accounts like “Employee Bachatbridhi Retirement Fund” of CIT, then such amount may be subjected to refund only as per the procedure under Section 12 of the Operation Procedure of the Employee Bachatbridhi Retirement Fund. Entities may want to make alternative arrangement or enquire with CIT for releasing such amount despite the restrictive provision of Section 12. 

Regarding the taxation on the amount that is being proposed to be transferred to the SSF, it’s been two years Finance Act has introduced a relief that if the participant wants to transfer the amount from CIT/approved retirement fund to SSF, the tax applicable under Section 88 of the Income Tax Act 2058, would not be applicable at this stage. 

The new generation have not even started their job career but are pretty much bolted into disadvantage already !! and So are the self-employed ones.

What is this random 2078.03.31 cut off date? This is a significant cut off date if the contributor is actually thinking of participating in SSF.
As per Directive on Operation of Social Security Schemes, 2075
दफा २०(१): संवत् २०७८ साल साउन १ गते वा सो भन्दा पछि कोषमा योगदान प्रारम्भ गर्ने सबै योगदानकर्ता निवृत्तभरण योजनामा समावेश हुनेछन्।
दफा २०(२): यो दफा प्रारम्भ हुँदाका बखत कोषमा योगदान गर्ने योगदानकर्ता तथा यो दफा प्रारम्भ भएपछि संवत् २०७८ साल असार मसान्तसम्ममा कोषमा योगदान प्रारम्भ गर्ने योगदानकर्ताले कोषमा लिखित रुपमा निवेदन दिई निवृत्तभरण योजनामा सहभागी हुन सक्नेछ ।

So, what is the implication of this date? 2078.03.31
As discussed in my another blog here, 20% of Basic Salary – MAX(20% of Basic Salary – 3 × Prevalent Minimum Basic Remuneration, 0) amount is allocated to the Pension Plan Sub-scheme of the SSF.
Rest of the 8.33% of Basic Salary + Rs. X + MAX(20% of Basic Salary – 3 × Prevalent Minimum Basic Remuneration, 0) goes into the Retirement Plan Sub-scheme of SSF.

However, if the participant starts contribution in SSF before 2078.03.31 then the participant can decide to opt to transfer the amount in Pension Plan Sub-scheme to Retirement Plan Sub-scheme. So to an employee participating in the SSF before 2078.03.31, the SSF is no different than other approved retirement funds, i.e. the amount can be withdrawn at the point of termination of the employment engagement. More on this in my another blog here

How is the new generation or the self employed people bolted into disadvantaged? 
This cut off date clearly has given an added advantage to the people already into the labor market and enrolled and contributing in SSF before the Ashad end 2078. However, what about the youths who are yet to enter into the employment? What about the self employed people who are planning to go into employment in later date? 

This should have been an issue for massive political discussion

Ideology plays a major part of framing the Social Security debate. Key points of philosophical debate include, among others: 
• degree of ownership and choice among investment alternatives in determining one’s own financial future;
• the right and extent of government taxation and wealth redistribution;
• trade-offs between social insurance and wealth creation;
• whether the program represents (or is perceived as) a charitable safety net (entitlement) or earned benefits; and
• intergenerational equity, meaning the rights of those living today to impose burdens on future generations. 
Retirees and others who receive Social Security are always a important block of political voters in the any country around the world. Indeed, social security is the first rail of political votes. No wonder the political serpents always have something they want to do about social security bypassing the free economy. It is political wash friends. Your government is not here to help you. 

The free market argument is that that Social Security reduces individual ownership by redistributing wealth from workers to retirees and bypassing the free market. Social Security contribution paid into the system cannot be passed to future generations, as private accounts can, thereby preventing the accumulation of wealth to some degree. Private accounts also have a much higher rate of return than Social Security accounts. 

My position is pro-privatization. Individuals should be allowed leeway in decisions about the securities in which their accounts are invested and which allow the funds to be inherited by the workers’ heirs. Currently, the USA, UK, Sweden, and Chile are the most frequently cited examples of privatized systems and it has worked pretty well.

But this is always a topic for philosophical debate and ideological controversies, so it is always a topic for political discussion at the time of elections. Honestly, we were all minding our own business until when PM KP Oli thought we were in need of “Social Security Plan” without even generally taking our views. The government were already onto our incomes taking to the tune of 36% taxes on income and now after our savings. 

The Right to Collective Bargaining

C098 – Right to Organise and Collective Bargaining Convention, 1949 (No. 98) Nepal has ratified to this ILO Convention in Nepal 11 Nov 1996 and is in force.
The General Conference of the International Labour Organisation, Having been convened at Geneva by the Governing Body of the International Labour Office, and having met in its Thirty-second Session on 8 June 1949, and Having decided upon the adoption of certain proposals concerning the application of the principles of the right to organise and to bargain collectively, which is the fourth item on the agenda of the session, and Having determined that these proposals shall take the form of an international Convention, adopts this first day of July of the year one thousand nine hundred and forty-nine the following Convention, which may be cited as the Right to Organise and Collective Bargaining Convention, 1949. 

But in case of the implementation of SSF, can the employer and employee agree to not participate in SSF but instead plan a better retirement plan with better returns? No. It is not allowed under Section 64 of the SSF Act.
दफा ६४: सामूवहक सौदाबाजीले प्रभाव नपर्ने: यो ऐन वा यस ऐन अन्तर्गत बनेको नियमावलीमा उल्लेख भएको व्यवस्थालाई सामुहिक सौदाबाजीले सम्बन्धी व्यवस्था वा संझौताले प्रभाव पार्ने छैन ।
This is just basic anti free market. Controlling market by regulatory domination. If something is anti-free market, someone is definitely getting unjust advantage. 

I found this is the protest banners of Commercial Bankers in Nepal “ILO अभिसन्धि १९४९ (नं ९८) नागरिकको मौलिक हक, श्रम ऐनको विपरीत, रोजगारकर्ताको Right to Organize and Right to Collective Bargaining गर्न पाउने हक कुण्ठित हुने गरि योगदानमा आधारित सामाजिक सुरक्षा योजना ल्याईएको ।”

No one is looking out for you ordinary citizen

Ordinary citizen in employment have no option. There are no one to help you.
To quote Ronald Reagan: “The nine most terrifying words in the English language are: I’m from the Government, and I’m here to help.”

The government is here to help you? Find this very hard to believe. Bankers have been fighting against SSF but I don’t think the banker’s fight will help the ordinary people’s either. Bankers have been taking stance against the implementation of SSF and have filed a writ application to the Supreme Courts on the matter but from what I understand their demand is to exclude banks from the purview of the SSF. Therefore, it’s not going to help us the normal ordinary folks in employment. The Supreme Court’s decision on writ application of the bankers will definitely be an interesting thing to follow. 

Here’s the link to writ petition and from Supreme Court


  1. मौद्रिक सुविधा उत्प्रेरणाको महत्त्वपूर्ण तत्त्व हो । कर्मचारीको इच्छाबेगर उनीहरूको सुविधामा कटौती गर्दा कर्मचारीहरूको उत्प्रेरणा र मनोवलमा ह्रास आई संगठनको उत्पादकत्वमा नै असर पर्न जाने । Full Text Here 
  2. जबसम्म कर्मचारीको सेवाको सर्त र सुविधालाई कुनै निश्चित कानूनले व्यवस्थित गरेको हुँदैन, त्यस्तो परिस्थितिमा रोजगारदाता र कर्मचारीबिचमा भएको करारीय सम्बन्धलाई हेर्नुपर्ने ।रोजगारदाता र कर्मचारी / श्रमिकको सेवा, सर्त र सुविधाको सम्बन्ध पनि एकप्रकारको करारीय दायित्व नै हो । यस्तो करारीय दायित्व करारका पक्षहरूलाई कानूनसरह नै लागू हुन्छ । कानूनसम्मत भएको करारको सर्त उल्लङ्घन गर्ने पक्षले कानूनी दायित्व निर्वाह गर्नुपर्ने ।
    सरकारी सेवामा निरन्तर काम गर्ने अवसर पाएका कारणले मात्र फरक फरक सर्त लागू हुनेगरी भएका अलग अलग नियुक्तिलाई सुविधा प्राप्त गर्ने प्रयोजनको लागि सेवाको निरन्तरता भएको मान्न नसकिने । Full Text Here

To conclude:
I think SSF should be optional. Give a breathing space or a leeway to people who are pro-privatization, pro-free market or pro-small government.