Senior labour officials called on businesses, manufacturing enterprises and other private institutions that are covered by the labour law but have not yet been registered with the National Social Security Fund (NSSF) to do so as soon as possible.
According to a notice by the Ministry of Labour and Vocational Training, more than 10,000 existing institutions are already registered and will be fulfilling their obligations to pay into the new pension fund from October onwards.
Contribution to pensions will be two per cent from employers and two per cent from employees themselves and will be automatically deducted from payroll starting October 1.
The announcement was made at a July 11 meeting to promote the implementation of the pension system for employees under the provisions of the labour law.
The meeting marked the first day in a 90-day campaign to disseminate information on social security obligations and benefits of pensions.
NSSF director-general Ouk Samvithya said that while the deduction of contributions from pay would be effective in October, all new institutions that have not yet registered with the NSSF need to participate by registering on time.
He urged all businesses to fulfil their obligations in order to provide retirement benefits to their employees in their old age.
“We are not requiring existing NSSF member to re-register, but we invite businesses and enterprises that haven’t registered to do so now as we have announced.
The registration is for the businesses themselves and for the employees. We now have three months left for preparation before it takes effect,” he said.
Labour minister Ith Samheng said the implementation of the NSSF for pensions was a step towards the development of a complete social security system in Cambodia.
He said the implementation of the new regime also contributed to the development of a strong, sustainable and environmentally friendly economy for the benefit of all people and especially to protect those at high risk of falling into poverty when reaching old age.
He added that since the regime has just been implemented, the dissemination of policies must be detailed so that businesses understand and are ready to meet their new obligations.
“The capital and provinces must carry out this work. We are not placing this burden on the NSSF to inform everyone. It’s under the government and the ministry’s framework to inform people through this important campaign,” he said.
The NSSF law covers four main work-related issues, including occupational risk insurance, healthcare, pensions and unemployment.
The government has created frameworks to oversee three of the four already to some extent such as the occupational risks division implemented in 2008, the healthcare division implemented in 2016 and now the pension division, according to Samheng.
As of June, the NSSF had registered about 10,000 private businesses and enterprises with about two million employees for eligibility for occupational risk and healthcare benefits.
Kaing Monika, deputy secretary-general of the Garment Manufacturers Association in Cambodia (GMAC), said this scheme was part of the NSSF’s plan for quite some time already and their members have been preparing to participate in it in compliance with the law.
However, Monika opined that the plans might add too much cost for employers amid difficult economic times and just ahead of the planned review of the minimum wage for 2023, making next year a tough one for the industry in terms of cost increases.
“We call on relevant ministries to continue to make necessary administrative reforms to increase the ease of doing business here. We also call on the workers and unions to kindly cooperate with their employers to help improve productivity in order to offset this cost increase, which could erode our sector’s competitiveness,” he added.