KATHMANDU, Aug 7: While the government launched Social Security Fund (SSF) eight months ago with much fanfare, people are still attracted toward Employment Provident Fund (EPF), data shows.
Data compiled by the EPF shows 1,480 offices with 61,155 new members joined it in fiscal year 2018/19.
Though the SSF formally came into operation from Fiscal Year 2019/20, it had started enrolling members from November last year.
According to the EPF, 24,155 of the members it added in FY2018/19 are contributors from newly-joined offices, while remaining 37,000 are from existing offices. With this, the number of member offices of the EPF reached over 30,000 with membership base of 600,000 individuals as of April 13. It added around 15,000 members in the past three months alone.
The SSF on the other hand has 4,200 member offices with around 35,000 contributors.
Rama Bhattarai, the spokesperson for the SSF, said companies should have joined the SSF as provident fund too is integrated in the contribution-based social security scheme. "But with the EPF continuing its operation, many companies and individuals are still attracted toward it," she added.
Bhattarai also said that transfer of fund from the EPF to the SSF has been affected due to issues like EPF's long term loan to its members and investment in mega projects. “But the contributors should be transferred to the SSF at the earliest,” she added.
The EPF provides several social security benefits like accident indemnity, funeral grant, welfare scheme (insurance), medical insurance and participation of members in profit.
“These benefits have created positive image of the EPF among its members,” Om Krishna Shrestha, the spokesperson for the EPF, told Republica. “It shows how the EPF is serving its members.”
The EPF also has introduced loan schemes for the contributors.
Meanwhile's the EPF's provident fund collection increased by 15 percent in FY2018/19, while loan disbursement has also increased accordingly.
"The EPF was also preparing to introduce provident fund for independent professionals like doctors, engineers and entrepreneurs, among others,” he said, adding: “We are facing some practical problems to introduce it." He also said that the provision could accommodate migrant workers who are deprived of security money when they retire from their job and come back to Nepal.
The EPF manages provident fund (PF) on behalf of the government, public and private sector employees.
The contribution from an employee is 20 percent -- 10 percent deducted from their salary and 10 percent supplemented by their employers. The contribution amount is sent to the EPF on a monthly basis when salary is distributed.
Meanwhile, an individual should contribute 31 percent in the SSF – 11 percent deducted from the salary and 20 percent supplemented by the employer. SSF has schemes like medical treatment, health and maternity security, old age security, accident and disability security and dependent family security for its members.
The EPF has fund size of Rs 300 billion from contributors as at FY2018/19. The fund size was Rs 278.7 billion in FY 2017/18, Rs 246.5 billion in FY2016/17, Rs 217.6 billion in FY2015/16 and Rs 187.5 billion in FY2014/15.