The NSSF Pension Scheme: Providing Social Security For Cambodians.

One of the most important social policy achievements of the 20th century was the development of social security programs and institutions.

Any scheme of social protection established by law or other legally required arrangement that offers people some degree of financial security when faced with the uncertainties of old age, mortality, incapacity, disability, unemployment, or parenthood is referred to as social security. Access to curative or preemptive medical care may also be provided.

The National Social Security Fund’s pension scheme was put into effect by Cambodian regulations on July 5, 2022. (NSSF). On October 1st, 2022, pension contributions will begin.

The implementation is described in detail in Prakas Nos.168 on the Procedures and Formalities for Registering Enterprises, Institutions, Workers, and Employees, and Contributions for All Persons Defined by Provisions of Labor Law, and 170 on the Commencement Date of Pension Contribution for the Compulsory Contribution and Voluntary Contribution.

Benefits and Registration

The pension scheme automatically enrolls all workers and employers who have previously registered with the NSSF for health and accident insurance; further registration is not required. Within 30 days of Prakas No. 168 coming into effect or the date the firm was incorporated, nonregistered businesses that have at least one employee must register their business with the NSSF. No later than three days after beginning their employment, unregistered employees must register with the NSSF.

The four types of benefits offered by the NSSF pension scheme are: old-age pension, disability or incapacity pension, survivor pension, and funerary benefits. The NSSF member’s eligibility for benefits is determined by a percentage of their total contributions during the period of their membership as well as the amount of those contributions.

Necessary Contributions

Employers and employees are each jointly responsible for making a pension contribution. The NSSF pension program will be implemented gradually as the contribution rates increase. These are the phases:

Phase 1: From the beginning of the initial contribution period through years 1–5, the total required pension contributions will equal 4% of employee salaries.

Phase 2: From years 6 through 10, all required pension payments will equal 8% of employee wages.

Phase 3: Total mandatory pension contributions will rise to 10.75 percent of employee salaries after the pension program has been in existence for 10 years. After each succeeding 10-year term, there will be an extra 2.75 percent rise. (It has not been disclosed if there is a limit on future increases.)

The maximum monthly salary that can be utilized to determine NSSF contributions is KHR 1,200,000. (approx. USD 300).

The processing of monthly pension contributions must be completed by the fifteenth day of the following month. As an illustration, the due date for March’s pension contributions is April 15. Employers must make a request to the NSSF for permission in order to pay contributions on an annual basis.

For registered employees 60 years of age and above, employers are exempt from the requirement to make mandatory payments. However, if they do so within a year of Prakas No. 168 coming into effect, registered employees who will be 60 or older on July 1, 2022, can make voluntary contributions (i.e., until July 5, 2023).

Contributions made voluntarily

The NSSF pension plan additionally permits voluntary contributions from NSSF members who are:

  • Under 60 years old, unemployed, and financially capable of continuing to make contributions;
  • Older than 60 years old and planning to keep contributing; or
  • Earning more money than the required system’s maximum pay cap.

Voluntary contributions increase the total amount made by the NSSF member, which will ultimately increase the future pension benefits which are available to them. Individual contributors should arrange their voluntary payments directly with the NSSF, and contributions made under the voluntary system must be equal to or higher than those given under the compulsory framework.

Every Cambodian’s life will be directly or indirectly associated with the NSSF pension plan. This will support elderly Cambodians, disabled workers, wounded soldiers, and families that have lost a spouse or parent.

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