Pension Scheme Regulation Updates
On 05 July 2022, the Labour Ministry issued three implementing regulations (Prakas) (Nos. 168/22, 169/22, 170/22) determining the rules for the contribution of pensions. The implementing regulations apply to all employers and individuals under the jurisdiction of the Cambodian Labour Law:
- What has been introduced
- The frequency of contribution payments and procedures to file payments, report staff movement, and make changes in company details.
- A funerary allowance equivalent to the last 5 (five) months’ pension with a minimum equal to 2,000,000 (two million) Riels.
- Funerary allowances would be disbursed in the event of a pensioner’s death. This allowance may be applied for by persons who are either assigned by the deceased pensioner to receive the funerary allowance, an old-age pensioner, or a person incapacitated due to serious accident or illness.
- When do companies actually begin payments?
- Payments for pension contributions shall commence from 1 October 2022 and shall be made no later than the 15th (fifteenth) day of the following month (see Articles 2 and 11, Prakas No. 168/22).
- Contribution payments need to be made on a monthly basis to the National Social Security Fund (“NSSF”).
- How are companies to pay pension contributions?
- The employer needs to collect and pay contributions to NSSF’s designated bank account via an internet banking service, or other services directed by the NSSF.
- Alternatively, employers also may opt to pay contributions annually by requesting NSSF for this arrangement and fulfilling the relevant duties as set out under Prakas No. 168/22.
- What if an employee is over 60 years of age?
- If an employee is over 60 years of age, the employer will no longer be obliged to pay pension contributions (see Prakas No. 168/22).
- Should employees over 60 years of age wish to voluntarily start, or continue, paying pension contributions, they may register themselves with NSSF for the voluntary contribution scheme and thereafter be eligible to receive the old age pension after contributing for at least 12 months.
- Where employers are found not to comply with the new implementing regulations, a transitional penalty under the Social Security Law may be applied.
This alert is for general information only and is not a substitute for legal advice.