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Private-sector pensions a step closer

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Labour ministry spokesman Heng Sour. Heng Chivoan

Private-sector pensions a step closer

Prime Minister Hun Sen issued a sub-decree that grants pension funds for private-sector employees who are lawful under the Labour Law in a bid to reduce poverty among the elderly and alleviate burgeoning financial burdens on the families that take care of them.

The new legislation will be effective once the Ministry of Labour and Vocational Training and the Ministry of Economy and Finance sign off on announcements that supplement and govern the application and implementation of the law, labour ministry spokesman Heng Sour told The Post on March 7.

Comprising 10 chapters and 40 articles, the sub-decree defines a number of mechanisms, conditions, protocols and procedures on contribution payments, accumulation rates, claims and dispersion of benefits.

“The sub-decree . . . [also] covers [those] working for two or more employers. The National Social Security Fund [NSSF] is the sole institution with the capacity to manage and handle the social security benefits from pension funds, as stipulated in this sub-decree,” it said.

In the first five years, it said, private-sector employees are to contribute two per cent of their monthly pay check to their pension, and the amount will be matched by their employer.

Currently only civil servants and veterans have retirement funds set aside.

Labour rights advocate and Centre for Alliance of Labour and Human Rights (Central) executive director Moeun Tola lauded the move, but voiced caution that irregularities could arise if the language in the procedures and processes is not clear enough to provide proper guidance in the implementation of the sub-decree.

“While this is fine news, we do need to take a look at some of the conditions surrounding subscription payments and those that guarantee transparency and accountability in managing these budgetary packets.

“This is because the money belongs to employees whose salaries are to be docked each month. We have to monitor the matter and ensure that the employers make their partial contribution as well,” Tola said.

Taking a wait-and-see approach but vowing to keep tabs on the proceedings, he said: “Will the deductions for contributions from employees and employers be correct? Later, in managing this budget, who will assume a transparent role and update income [figures]?

“In certain countries, they take this money and make various investments. But if the money is used with nefarious intentions, it’ll lead to abuses of worker rights.”

Tola said he expects the government to explore additional benefits to provide the people, listing unemployment and retirement funds as prime examples. He said the state currently provides just two benefits – work injury and health risks.

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