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Nepal’s Social Security Scheme
Nepal’s Social Security Scheme
KTM Metro reporter
November 29, 2018
Kathmandu: The government of Nepal has launched the Social Security Scheme on Tuesday, November 27, 2018 that would be a large safety net for all the citizens in Nepal, and it would relieve the government from the burden of providing pensions to its retired employees, and even could gradually phase out the senior citizen allowance, and other sorts of allowances it has been providing so far, as the Social Security Scheme would cover everything anybody needs in his or her life.
The Social Security Scheme would accumulate a huge sum of money, which could be used for the development projects. However, the government has not envisioned such a scheme, and the government wants to deposit such a sum in the banks at certain interest rate for the security.
Even the self-employed folks could participate in this scheme. The employees have to pay 10 percent of their salaries and then the employers are to add 21 percent to make it 31 percent. So, almost one third of the salary of every employee would be saved means deposited in the Social Security Scheme Fund.
The State manages it and gets the earnings from the money the participants have deposited, and would pay back in one installment with its earnings or pensions every month as the beneficiaries opt for. In order to be eligible for the pension scheme one has to deposit her or his 31 percent of earnings in this fund for 15 years.
The amount of the pension one receives per month would be the total sum one has deposited divided by 180 means 15 years. One could live financially safely and comfortably physically with the retirement benefit. So, the State might not need to provide the current senior citizen allowance for the future generations when they became eligible for the pensions from the deposits they had made during the lifetime earnings.
The State employees would automatically join this scheme, the employees of the private companies also do the same, and the self-employed folks might have an option not to do so.
Everybody would benefit from this scheme. All the trade union leaders, the private companies, and working folks are happy with the Social Security Scheme. The employees are happy because they have the financially safe future. They don’t need to worry about who would pay for their old age. The employers are happy because they don’t need to worry about the future financial status of their employees.
Everybody would receive a Social Security Scheme account number, which s/he could use for the lifetime no matter where s/he works. Any employer would subtract 10 percent of the salary and add 21 percent to it and deposit it in a nearest bank in this account.
