Cambodia Begins Implementation Of National Pension Scheme

• Published date: 15 July 2022
• Subject Matter: Employment and HR, Retirement, Superannuation & Pensions, Employee Benefits & Compensation
• Law Firm: Tilleke & Gibbins
• Author: Mealtey Oeurn, Jay Cohen and Robert Gassman

On July 5, 2022, Cambodia issued regulations implementing the pension system of the National Social Security Fund (NSSF). Pension contributions will begin on October 1, 2022.

The implementation is detailed in Prakas No. 168 on the Procedures and Formalities for Registering Enterprises, Institutions, Workers, and Employees, and Contributions for all Persons Defined by Provisions of Labor Law (Prakas No. 168) and Prakas No. 170 on the Commencement Date of Pension Contribution for the Compulsory Contribution and Voluntary Contribution.

Registration and Benefits

All employees and employers previously registered with the NSSF for health and accident insurance are automatically enrolled in the pension scheme, with no additional registration necessary. Both new and existing nonregistered employers with at least one employee must register their company with the NSSF within 30 days of Prakas No. 168 entering into force or on the date of establishing the company. Nonregistered employees are required to be registered with the NSSF no later than three days from the start of their employment.

The NSSF pension system features four categories of benefits: old-age pension, incapacity/disability pension, survivor pension, and funerary benefits. The amount of benefits available to an NSSF member is based on a percentage of the person's total contributions and the period of those contributions.

Compulsory Contributions

The pension contribution is a joint responsibility shared equally by employers and employees. The rates of contribution will increase in steps as the NSSF pension program is phased in. The phases are as follows:

• Phase 1: In years 1-5, total compulsory pension contributions will amount to 4% of employee wages from the starting date of initial contribution.
• Phase 2: In years 6-10, total compulsory pension contributions will amount to 8% of employee wages.
• Phase 3: After the pension program has been in place for 10 years, total compulsory pension contributions will increase to 10.75% of employee wages. There will be an additional increase of 2.75% after each...