– Manoj Gyawali
Looking at the geography and situation of the country, there is no need to object the concept of Social Security Fund. What the Social Security Fund is trying to address is the government or the state will take responsibility for the safety of the family, not just when the worker is employed, but also in case of his or her disability.
It also comes with the services and medication treatment that he/she will get when he/she retires tomorrow or in his/her old age. The concept that surfaced to cover the safety of a person and his family whether he/she is working or not, is worth the praise. However, why the dispute arose despite such provisions remains important.
Why did the employees not well-receive the concept brought for the new era? This is even more important.
The Social Security Fund Act came as 2076 Act. Procedures and regulations were also introduced accordingly. Likewise, the classification of employees also came in different ways. One of them was, a government employee’s salary and another was banking or insurance or other area where there were already provisions regarding employees’ retirement. That means institutions with facilities other than pensions. The others are the institutions of the private sector without such facilities, where people were employed and paid with monthly salaries, but there were no other service facilities. It turned out to be a real gift for the staff of such organizations. There is no situation to protest.
Another point was the government employees. Government employees are not covered under the Social Security Act, but included as per the pension fund Act 2076. That way, the benefits they get is very fine on the basis of their contribution. So they too had to go quietly.
Now, who is at the receiving end with the formulation of the new law? – Our sector. It was a case of getting more and more service. Now, before the new law was introduced, we contributed to Provident Fund and the employers used to add 10 per cent. This way, it used to be 20 per cent. We could get the money accumulated in provident fund the following day we leave the job. There was no additional tax. But this law has been unjust.
There used to be support and facilities even when one takes loan of 90 percent of the collected fund of 20-30 lakhs, citing business purpose. Today, the employees and the employers are expected to contribute 7.5 per cent. It is putting in more contributions than yesterday, but reducing the service facilities. The pension to be received after collecting 12 per cent including 6 per cent from employees’ salary and another 6 added by the employers as per the Pension Fund Act, and the pension with contribution of 31 percent is not even half, how is it possible?
The question is can the state distribute discriminatory return on investment. Shouldn’t the return be on investment basis? Nonetheless, here it was done on the basis of job categories.
Government employees get pension by multiplying the last deducted salary and total working years, and then divided by 50, whereas we get pension by dividing the limited return by 180, irrespective of how much we contribute? The other thing is I have to pay 15 percent tax. At present, I pay 36 percent tax. Then again when I withdraw the money, I again have to pay 15 per cent tax. This way, I will be paying the total of 51 per cent tax. Why is the same provision not implemented for government employees? The same fund, a government employee wants, can withdraw in the middle and we cannot.
Another loophole is, ‘retirement’ of the employees in the banking sector generally takes place in 58 years. However, here, one can get the return only when he contributes for 15 years and reaches 60 years. If I retire in 58 years, I have to wait for 2 more years to get pension.
This was discriminatory as discussions were not held on practical issues. It is obvious for people to feel disappointed as three of the provisions have been discriminatory between the Pension Fund Act and Social Security Fund- its laws, tax rates, and returns, which we have clearly conveyed to the concerned Ministries, the central Bank and the Association. If the value of investment is the same, why is there difference in return?
Instead of waiting for 2 years, let’s make arrangements so as to give service and facilities on the next day of the retirement itself. Let’s manage taxes. The Social Security Fund also has some good aspects. We must abide by the policy formulated by the state. However, we demand all the minor errors be corrected. Let us focus on the issues of service tax and double taxation among others. Government employees and private sector employees should be provided with investment-based returns, rather than who works where. The main issue is not being discriminatory.
(Based on the conversation between Himalayan Post and General Secretary of Development Bankers Association Nepal and CEO of Jyoti Vikas Bank Manoj Gyawali )