September 15: As the final verdict regarding the Social Security Fund (SSF) is pending in the court, a large number of employees working in banks and financial institutions (BFI's) are sceptical to join the SSF.
The employee unions of banks and financial institutions started protesting in the past stating that the fund ignored the issues raised by them and put unnatural pressure on them.
The union of employees of banks and financial institutions, which has been refusing to participate in the Social Security Fund, had filed a case against the Social Security Fund in more than two years ago.
In July 2021, a division bench of justices Tej Bahadur KC and Bam Kumar Shrestha presided over a hearing on the case. As the opinions of the two justices differed, it was decided to present the filed by the bank employees against the fund to the full bench of the Supreme Court.
So far, the full bench has yet to issue the final verdict in the case.
Many times, the court failed to hear the case due to time constraints.
As the final verdict of the case has not been issued, a large number of employees working in BFI's are out of the scheme operated by the SSF.
In the petition, the bank employees have argued that BFIs are governed by the Banks and Financial Institutions Act, which was in force before the implementation of the Labor Act of 2074.
Regulations regarding the appointment, terms and conditions of the service and benefits of bank employees, are done after taking approval from Nepal Rastra Bank. BFI staff have mentioned that the management of various post-retirement facilities has been made as per the Act, and ave requested the SSF that their participation in the scheme should be made voluntary. BFI employees are doubtful that the returns they will get after the contribution made to the fund will be of much value.
According to the pension scheme of SSF, the total sum of 20 per cent of the amount accumulated in the name of the contributor every month and the total amount, including the interest earned on the sum divided by 160 has been arranged to be received by the contributor as a monthly pension after retirement. An employee who deposits Rs 72,000 annually at the rate of Rs 6,000 per month will accumulate Rs 21.6 million after working for 30 years.
If the employee retires, his/her lifetime savings will be divided by 160 and will be entitled to receive only Rs 13,500 a month. The bank employees have been saying that this amount will be only 7.55 per cent of the amount they have deposited annually.
It is also mentioned in the petition that it is complicated to get back the money deposited by oneself and the return is less than the interest of fixed deposits. However, this matter is yet to be decided by the court.
According to the deputy executive director of the fund, Bivek Panthi, there is no situation to wait until the court's decision. He said that the fund desires to end the case quickly and to cover the employees of banks and financial institutions. "The fund is ready to address the demands raised by them to the extent," he said.
SSF started collecting contributions from 1 Ashar 2076 after it was formally launched by the then government led by KP Sharma Oli on Poush 11, 2075.
The fund, which initially involved workers and employees of the formal and informal sectors voluntarily, aims to cover all sectors. However, since most of the employees of banks and financial institutions are not participating in the fund, questions are being raised about its justification.
As of Shrawan 26, a total of 443,000 formal sector workers have joined the Social Security Fund. Workers who have gone abroad for employment are also joining the fund.