Social Security Fund Nepal

Presentation by Dr. Roshan Koju, Director, Information Management Division, Social Security Fund Nepal

• SSF originally established about 12 years ago with plan to collect 1% of Social Security Tax; starting to implement social security schemes – government recognized that tax-based system would not work sufficiently and therefore shifted to contribution-based system

• Now 2 major schemes in place:

  • For formal sector employees in Nepal

    • estimate of 1.8 Mio domestically formal sector workers

    • currently enrolled 400.000 formal sector workers and 17.000 employers

    • financed through salary-based contributions amounting to 31 % of a worker’s/employee’s basic salary whereby 11 % is paid by the worker/employee and 20 % is borne by the employer

    • SSF was established through a law and covers the following contingencies - 4 sub-schemes (on medical and non-medical benefits)

      • a maternity protection, medical and health protection scheme schemes

      • an employment injury and disability protection scheme

      • dependent family protection scheme

      • an old age pension scheme

  • For (Nepali) migrant workers, working outside Nepal

    • target group: estimated 2.5 Mio migrant workers (in around 100 countries worldwide); currently about 216.000 enrolled (July 2023)

    • mandatory for migrant workers, linked to the work permit to work abroad issued by Ministry of Labour

    • financed through salary-based contributions to 21.33 % of a worker’s basic salary or maximum 3x minimum basic salary (minimum basic salary is the minimum wage defined by the Ministry of Labour / Government of Nepal every 2-3 years; currently around NRs. 15,000 / EUR 100 per month); Contribution breakdown:  Accident and disability and life insurance - 7.48%, Old age pensions - 13.85%; Total - 21.33%

    • whole contribution is paid by employee! (not employer in this case)

    • scheme only covers the employee, not her/his family in Nepal (update in April 2023: includes the spouse); except for case of life insurance case – benefit is paid to dependents

    • almost 13.000 migrant workers die abroad every year, close to 30 per day!

    • all schemes bundled under 2 schemes

      • employment injury, disability protection scheme and dependent family protection scheme

      • maternal protection, medical and health protection scheme schemes, old age pension scheme

• currently discussion going on that SSF might offer a scheme for the informal sector as well, estimate of 1.8 Mio domestically formal sector workers

• all SSF schemes are managed IT-based

• working with 3(-4) layers of systems: presentation layer, business layer, integration layer and data layer

• public portal can be accessed by employer and contributor, also via mobile app

• some Electronic Health Record (EHR) systems have been integrated with SSF scheme IT system; EHR for 46 hospitals integrated

• integration layer covers e.g. payment system, mobile wallet, Electronic Health Record / Medical Record system, openIMIS

• 85% of claims reaching SSF comes through openIMIS; medical team at SSF will review claims and send info to the accounting system and release payment (re-imbursement)

Discussion, Q&A

… on interoperability

• all systems in the integration layer have their own specific purpose with regards to business processes e.g. openIMIS was originally used for claim management, SSF has their own beneficiary management system (SoSys), which is exchanging data with openIMIS

• current plan is to convert system to have all business processes served by openIMIS - ILO is supporting SSF with an IT team and technical advice to help converting all business processes from existing systems to openIMIS

• using FHIR API to integrate

… On Financing SSF staff

• 70 employees at SSF

• SSF is not allowed to finance staff cost from scheme contributions

• Originally SSF was granted a loan by the government to finance staff cost as interim solution

• Funding basically through interest paid for National Welfare Fund (treasury fund) that is also managed under SSF

  • National Welfare Fund fed from payments by companies /organisations (employers) who are obliged when paying bonus to employees to pay 30 % from this bonus to the Nepal Welfare Fund (per Act every company / organisation making a profit is obliged to pay a bonus)

… On Coordination with other social protection scheme providers

• Question: Does SSF coordinate with other social protection (scheme) providers e.g. HIB in order to avoid duplications in coverage of services, re-imbursement to providers or benefits?

• SSF expecting overlaps to a certein degree when starting to offer services for the informal sector (like HIB)

• in the formal sector certain overlaps with schemes offered by Employment Provident Fund (EPF) but for the government employees, the civil service

• SSF expectation: The government, the national policy commission, is working on these overlaps; there will be some umbrella act in the near future; governement is also working to provide a Universal Social Protection scheme - SSF, HIB, EPF and CAT will have some defined role in this in the future