Social: 15 years after our Group, a pension scheme instituted in the private sector in Cambodia

In mid-August, Som Sothy, Deputy Director of the Customer Service and Public Relations Department of the National Social Security Fund (FNSS), came to explain to the department heads of the PPM-Confirel-Investco Group the modalities of the implementation by the government of the pension scheme for the private sector.

The new scheme was introduced on July 1 and will pay pensions from October 1 this year. When employees reach age 60, the Fund calculates their last six months’ salary to determine the pension. If an employee dies before age 60, the family will receive the pension for one year.

By law, all employees and employers already registered with the NSSF for health and accident insurance are automatically enrolled in the pension plan, with no additional registration required. New or existing unregistered employers with at least one employee will need to register their business with NSSF.

The pension system includes four categories of benefits: old age pension, disability pension, survivor’s pension and funeral benefits. The amount of benefits available to an NSSF member is based on a percentage of the individual’s total contributions and the period of those contributions. The monthly salary used to calculate the NSSF contribution is capped at 1,200,000 riels (about US$300).

Pension funding is covered by a shared contribution system. “The pension contribution is a joint responsibility shared equally by employers and employees. Contribution rates will increase in stages as the NSSF pension program is implemented.

Employers are relieved of the requirement to make mandatory contributions for registered employees age 60 and over. However, registered employees age 60 and over as of July 1, 2022, may make voluntary contributions by submitting an application to NSSF, as may unemployed individuals under age 60 who are financially capable of continuing to make such contributions. The introduction of this pension insurance for the private sector is a major social advance for all employees. Thanks to its Social Fund established in 2007, the employees of the PPM-Confirel-Investco Group were among the few in Cambodia to benefit from broad social protection. “The Group’s Social Fund already provides a pension for employees over 60 years of age, as well as financial support for maternity, health care, chronic illnesses, on- and off-the-job accidents, fire damage and family support in the event of employee death. The government pension system will complement the benefits of our Social Fund,” said Hym Piseth, Group Human Resources Director.