KATHMANDU, Dec 5: The government has revised the ‘Social Security Fund Investment Guidelines’ after it failed to incorporate a large number of individuals and institutions under its jurisdiction.
The government launched the Social Security Fund (SSF) scheme in 2018. Although a slew of efforts was made to persuade all employers to register with the SSF system issuing deadlines at different times in the past, the government has almost failed to do so due to a number of complications and uncertainty in the provisions forwarded in the scheme.
As of last fiscal year, a total of 12,479 employers and 168,242 individuals were registered in the contribution-based social security scheme. A total of Rs 1.61 billion was collected from them in the fund.
The number, however, is very low as compared to the total number of 922,445 employers and 3.4 million workers shown by the economic census 2018.
Issuing a press statement on Friday, the SSF said that the amended guideline has identified specific areas for effective mobilisation of the fund’s money for investment. In the new provision, the contributors in the SSF can receive loans under various headings.
According to the SSF, the contributors can receive home loan, education loan and emergency loan. Under the home loan, borrowers can receive up to Rs 7.5 million or the 15 years salary, whichever is low, to purchase a new residential building or to renovate an old house.
Similarly, up to Rs 3.5 million will be sanctioned for higher study inside the country or abroad for the contributors themselves or their family members. Regarding social work, a borrower can obtain a loan of up to Rs 500,000.
Likewise, the contributors can also receive bank guarantee loan, institutional loan and consortium loan under project loans. Similarly, investment in government bonds, fixed deposit, stocks and mutual funds have also been considered for the specialised loan to be provided for the contributors of the SSF.
The borrower, however, needs to have contributed at least for three years in the SSF and must have sufficient earnings to back up for repayment of the loan to be eligible for the loan under the scheme forwarded by the SSF.
The SSF has said that the amended guideline has sought to diversify the investment out of the money collected from the employees. Similarly, the new provisions are also expected to ensure the employees a reasonable rate of returns from the funds they contribute to the SSF.