- September 25, 2021 8:40 AM
- December 22, 2019 3:09 AM
- February 24, 2020 2:19 AM
PHNOM PENH – A meeting organized on July 11 by the Labor and Vocational Training Ministry gave more details on the upcoming implementation of the contributory pension system for employees of the private sector, as provided by the Labor Law.
Starting from Oct. 1, 2022, onwards, contributions will start to be collected from the companies registered with the National Social Security Fund (NSSF) to finance the pension scheme. The contribution is set at 4 percent of the total employees’ wage, before tax: 2 percent will be paid by the employer and 2 percent will be automatically deducted from employees’ payroll.
Ouk Samvithyea, director general of the NSSF, said that the social security system for pensions was set to ensure social security, income stability, and access to healthcare when members of the NSSF retire.
“For the first five years, the compulsory pension contribution is set at 4 percent of the total wages, of which 2 percent are paid by employers and 2 percent by workers,” he said during a meeting to promote the implementation of the social security system for pensions for individuals on July 11.
While Oct. 1 will start the first phase of the implementation of the pension system, Samvithyea explained that the contribution will then increase over time.
“After the first five years, workers and employers will have to pay 8 percent of the contributory wage for another five years [phase 2], and for the next 10 years, they will have to pay 10.75 percent [phase 3]. Then, the contribution will increase by 2.75 percent every 10 years,” he said. “The payment is the obligation of employees and workers.”
The minimum contributory wage is 400,000 riels (about $100) a month, while the contributory wage cap is 1.2 million riels (about $300).
As of June 2022, around 10,000 companies from the private sectors have already registered with the NSSF, representing around two million employees. The NSSF called on unregistered companies to do so in the coming three months.
The pension scheme will cover employees working in the private sector and is also open for registration for self-employed people, from both the formal and informal sectors.
Prior to the implementation of the regulation, the Labor Ministry plans to launch a campaign to promote the social security system for individuals over a 90-day period, from July to September 2022. It will target special economic zones, industrial parks, factories and enterprises across the country.
“Employers will gain benefits from workers. When workers have a pension, they will love the job and have hope for the future,” said Labor Minister Ith Sam Heng.
“The work of good workers can be highly productive. As for the workers, when they get old, they can no longer work. So, they have this pension to support themselves.”
Sam Heng added that, to be able to clearly explain the pension scheme, he will request two hours of time in every factory or company, so that workers can understand the obligations and benefits of the pension system.
The Ministry plans to disseminate the information to at least 80 percent of the total number of workers in factories within three months, he said.
Ouk Samvithyea said that this pension also applies to individuals in the public sector, air, ship, and domestic workers as well as self-employed workers.
The family members or the people who manage the funeral of those who have the pension can receive at least 2 million riels (approximately $500) or according to the last five months’ seniority.
Originally written in Khmer for ThmeyThmey, this story was translated by Sam Sopich for Cambodianess.