Cambodia social security law: mandatory pension scheme for workers

Under the Law on Social Security Scheme promulgated on 02 November 2019, there are mandatory pension scheme and voluntary pension scheme for persons defined by the provisions of the Labor Law, including personnel serving in air and maritime transportation as well as domestic workers. This article will provide an overview of the mandatory pension scheme stipulated in Sub-decree No. 32 dated 4 March 2021 on Social Security Scheme on Pension for persons defined by the provisions of the Labor Law. Voluntary pension scheme is not discussed in this text. Mandatory pension benefits include old-age pension, invalidity pension, survivor’s pension and funerary grant. (Art. 18, Law on Social Security Scheme)

1. Insured persons:

Who are covered under the mandatory pension scheme?

Sub-decree No. 32 covers workers of all sexes and nationalities in the formal economic sectors including persons who are defined by the provisions of the Labor Law and persons who work for more than two workplaces. (Article. 2, Sub-decree No. 32)

2. Registration with scheme

National Social Security Fund (NSSF) is the only operator institution in charge of direction and management of social security scheme on pension as prescribed in Sub-decree No. 32. (Article 4, Sub-decree No. 32)

Employers or owners of all enterprises and establishments who employ at least one worker must register with NSSF for pension scheme within 30 days after the Sub-decree No. 32 becomes effective, except enterprises and establishments that have already registered with NSSF for health care scheme and occupational risk scheme. Forms and procedures for the registration of enterprises and establishment for pension scheme will be determined by Prakas of Minister of Ministry of Labor and Vocational Training. (Article. 5, Sub-decree No. 32)

Employers or owners as mentioned above must register their workers with NSSF for pension scheme no later than 3 days from the date of the workers’ commencement of employment, except workers who have already been registered with NSSF. The registration of workers must comply with the data in Cambodian National Identity Cards for Cambodian workers or passports for foreign workers. Procedure, form and arrangement for the registration will be determined by Prakas of Minister of Ministry of Labor and Vocational Training. (Article 6, Sub-decree No. 32)

NSSF must issue membership cards to all workers who have been registered according to the data in the Cambodian National Identity Cards for Cambodian workers or passports for foreign workers. This membership card is issued without any charge. In case of loss or damage, NSSF members must immediately notify employers or owners of enterprises or NSSF and request for the duplicate card no later than 30 days. Arrangement and procedure for the issuance the duplicate of NSSF membership cards will be determined by Prakas of Minister of Ministry of Labor and Vocational Training. (Article 7, Sub-decree No. 32)

3. Pension contribution

Pension contribution is jointly paid by employer or owner of enterprise and establishment and worker. For the first period of 5 years, contribution rate is 4% of the contributable wage in which 2 % will be responsible by employer and another 2% will be responsible by worker. In case where enterprises and establishments pay wage in foreign currency, monthly wage must be calculated in Khmer Riel based on the monthly average exchange rate based on exchange rate of the National Bank of Cambodia which is notified by NSSF. Contributable wage as mentioned above will be decided by separate Sub-decree. (Article 8, Sub-decree No. 32) Contributable wage refers to wage before tax payment which will be used for calculation of contribution payment.

Payment of pension contribution is made on a monthly basis. Employers or owners of enterprises and establishments must collect and pay pension contribution for their parts and worker’s to bank accounts of NSSF at partner banks no later than the day 15^th of next month. In case where the employers or owners of enterprises and establishments have the ability to pay yearly contribution, they must make request to NSSF. The payment of yearly contribution must be made in the next month from the date of the month they request for yearly payment. Employers or owners of enterprises and establishments must pay this yearly contribution based on the calendar year. NSSF will adjust the amount of contribution in the early of next year. (Article 9, Sub-decree No. 32)

Employers or owners of enterprises and establishments who pay monthly contribution must provide report on number of all workers to NSSF no later than the day 20^th of next month. For those who pay yearly contribution must provide report on number of all workers to NSSF according to the following schedules:

a. In case where there is no out-and-in movement of workers, employer must report once every twelve months.

b. In case there is out-and-in movement of workers, employer must report no later than 15 days from the date of change.

Forms and arrangement for the report on number of workers will be determined by Prakas of Minister of Ministry of Labor and Vocational Training. (Article 10, Sub-decree No. 32)

Employers or owners of enterprises and establishments must provide payroll ledger or list of wage payment in electronic form or other wage payment documents of each month together with other relevant documents to NSSF for inspection upon request. (Article 11, Sub-decree No. 33)

Employers or owners of enterprises and establishments under the provisions of the Labor Law has the obligation to notify NSSF of closure, suspension, change of location of enterprise and establishment or change of legal status of the employer at least 30 days before the date of closure, suspension, change of location of enterprise and establishment or change of legal status of employer. Form and arrangement for the closure, suspension, change of location of enterprise and establishment or change of legal status of the employer will be determined by Prakas of Minister of Ministry of Labor and Vocational Training. (Article 12, Sub-decree No. 32)

4. Benefits

4.1. Old-age pension

Workers who are members of NSSF are entitled to old-age pension if those workers fulfill the following conditions:

a. Having registered with pension scheme;

b. Having the age of at least 60 years old;

c. Have paid pension contribution at least 12 months.

In case where members of NSSF have not paid pension contribution at least 12 months, they will receive the old-age allowance.  (Article 13, Sub-decree No. 32) 

4.2. Invalidity pension

Members of NSSF who become disabled are entitled to invalidity pension if the workers fulfill the following conditions:

a. Have registered with pension scheme;

b. Have paid pension contribution at least 60 months before the day of being disabled.

(Article 14, Sub-decree No. 32)

4.3. Beneficiaries of survivor’s pension 

Beneficiaries of survivor’s pension are entitled to survivor’s pension if there is death of old-age pensioner or invalidity pensioner who has paid contribution pension at least 60 months. (Article 15, Sub-decree No. 32) Beneficiaries of the survivor’s pension include spouse and child who are dependent on the person concerned, must fulfill the following conditions:

a. Beneficiaries do not have job with earnings above the poverty line.

b. Spouse must hold legal marriage certificate before the date that person concerned fall into sickness or other contingencies leading to death.

Child must have the following criteria:

• Single

• Not more than age of 18 

Child with disability or chronic diseases and without job with earning must be provided the survivor’s pension until death.

Entitlement to survivor’s pension shall be expired in the following cases:

• Beneficiary passes away;

• Spouse remarries in compliance with the law coming into force. In such a case, the person concerned must inform NSSF no later than 30 days following the date of new marriage. (Article 20, Law on Social Security Scheme)

The share of survivor’s pension shall be divided as follows:

• Spouse 50%

• Child 50%

• In case beneficiary is only spouse or child, such person receives 100% (Article 15, Sub-decree No. 32)

4.4. Funerary allowance

Beneficiaries of the survivor’s pension are entitled to funerary allowance when the old-age pensioner or invalidity pensioner passes away. If this obligation is not performed by the beneficiaries, the funerary allowance will be given to person who manages the funeral of the deceased. 

In order to get funerary allowance, there must be notification to NSSF about the death of old-age pensioner or invalidity pensioner within 2 weeks from the date of decease and fulfillment of form requesting for the funerary allowance by attaching certificate of death or other documents acceptable by NSSF. NSSF will issue the decision on payment of funerary allowance no later than 2 weeks from the date of receipt of the request. Procedure and form on provision for the funerary allowance will be determined by Prakas of the Minister of Ministry of Labor and Vocational Training pursuant to request of board of directors of NSSF. (Article 16, Sub-decree No. 32)

5. Claiming procedures

Members of NSSF who have fulfilled the conditions for entitlement to old-age pension benefit must fulfill the claiming form within the period of 3 months before the date the concerned person becomes entitled to claim.

In case where the member who is entitled to old-age allowance, they must fulfill the claiming form for old-age allowance within one month after the age of 60 years old.

Members of NSSF who have fulfilled the conditions for entitlement to invalidity pension benefit must fulfill the claiming form within one month from the date the concerned person becomes disable. In case where the disable person cannot make claim for the benefit due to serious disability of the concerned person, the claiming form can be made by legal representative of the said disable person.

Beneficiaries of survivor’s pension must fulfill the claiming form within 3 months after the date of the decease of old-age pensioner or invalidity pensioner or members of NSSF who have paid contribution at least 60 months.

Beneficiaries of survivor’s pension or person who manages the funeral ceremony for deceased old-age pensioner or invalidity pensioner must fulfill the claiming form no later than 3 months after the date of the decease of old-age pensioner or invalidity pensioner.

Old-age pension, invalidity pension and survivor’s pension benefits must be counted from the date of the claim. In case of failure to claim for the benefits due to force majeure, the concerned person can request for the benefits which cannot be claimed during the force majeure. The Benefit which cannot be claimed during the force majeure must be given based on the decision of the board of directors of NSSF. Claiming form for each benefit will be determined by General Director of NSSF. (Article 16, Sub-decree No. 32)

Pension benefits of old-age pension, invalidity pension and survivor’s pensions must be calculated per month. NSSF must arrange to provide monthly pension benefit in every half month. The payment for the first half month is made on the day 15^th of each month and the second half month is no later than the day 30^th of each month. (Article 27, Sub-decree 32)

The date of implementation of social security scheme for pension scheme for persons defined by the provisions of the Labor Law will be determined by joint Prakas of Ministry of Labor and Vocational Training and Ministry of Economy and Finance. (Article 39, Sub-decree No. 32) At the date of this text, the said joint Prakas has not been issued yet. Calculation of the pension benefit is not discussed in this text.

This article is not legal advice or opinion.

Sources: 

• Law on Social Security Scheme promulgated on 02 November 2019

• Sub-decree No. 32 dated 4 March 2021 on Social Security Scheme on Pension for persons defined by the provisions of the Labor Law