March 4: The government’s Social Security Fund has accumulated about Rs 51 billion in a period of five years since the launch of the contribution-based scheme.

As of Sunday, the SSF has collected Rs 50.84 billion from the contributors and employers listed in the fund. The fund has increased investment in various sectors according to its policy to diversify investment. According to social security fund investment procedures, the fund has invested in fixed deposits, shares, debentures, treasury bills, capital market, mutual funds, etc.

A large part of the accumulated amount is kept by the fund in the fixed deposit accounts of the banks. The fund earns 9 percent interest from the amount kept as fixed deposits. Banks can invest that amount according to their preference. SSF officials claim that this will help eliminate liquidity shortages in the market from time to time.

The fund is investing rapidly in development bonds as well. The fund is also giving loans to the contributors. Contributors are given special loans based on the contribution amount in addition to housing grants for housing construction, and educational grants to support the development of human capital.

SSF Spokesperson Bibek Panthi informed New Business Age that the funds collected are being invested in various sectors and mobilized for the benefit of the contributors to achieve high, sustainable and assured returns.

There is a provision that the SSF can invest in large projects, but so far it has not been able to invest in such projects. According to Panthi, it is currently under study. SSF officials believe that there is a little 'risk' in investing in such projects.

Targeting private sector workers, the then KP Sharma Oli-led government had formally announced the launch of contribution-based social security fund on November 27, 2018. The SSF started collecting money from the contributors from the beginning of the next fiscal year.

1,170,000 contributors join SSF

As of March 2, a total of 18,731 employers and 1,170,838 contributors have joined the SSF. The largest number of contributors is the Nepali migrant workers who go for foreign employment. The number of such contributors stands at 686,192. The SSF informed that 74 contributors are self-employed, which is the least among all groups. According to the fund, there are 484450 contributors from the formal sector and 122 workers from the informal sector who joined the SSF. Since it is a mandatory to join the SSF before getting a work permit for foreign employment, every person who goes abroad has joined the state-sponsored scheme.

However, officials say that the number of Nepalis who go abroad and continue contributing to the fund has not increased. Those who go for foreign employment must deposit Rs 2300 to the fund before getting a work permit. The self-employed must contribute 31 percent of the minimum wage to the fund. However, those contributing to the fund from overseas is not encouraging.

Increasing claim payments

SSF informed that it has settled claims of more than Rs 7.72 billion made by 1.5 million contributors under four different schemes, namely medical treatment, health and maternity plan, accident and disability protection plan, dependent family protection plan and old age protection plan.

Out of the amount collected in the fund, Rs 923.15 million have been paid to 54910 people for medical treatment, health and maternity schemes. Similarly, Rs 108.76 million have been paid to 2826 people under accident and disability protection scheme.

Similarly, Rs 126.85 million have been paid to 461 people under the dependent family protection scheme. According to the fund, Rs 6.56 billion have been paid to more than 70,000 people under the Old Age Protection Scheme.

According to the fund, the process of revising the procedure has been advanced to include the families of the contributors under medical treatment. Officials said that a decision will be made within the next week.