Implementation of national pension system begins in Cambodia

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

Implementation is detailed in Prakas No. 168 on Procedures and Formalities for Registration of Enterprises, Institutions, Workers and Employees, and Contributions for All Persons Defined by Labor Law Provisions (Prakas No. No. 168) and Prakas No. 170 on Opening Pension Contribution Date for Compulsory Contribution and Voluntary Contribution.

Registration and benefits

All employees and employers previously registered with the CNSS for health and accident insurance are automatically affiliated to the pension scheme, with no additional registration required.

New and existing unregistered employers with at least one employee must register their business with the NSSF within 30 days of the entry into force of Prakas No. 168 or the date of establishment of the business.

Unregistered employees must be registered with the NSSF no later than three days after commencing employment.

The CNSS pension system comprises four categories of benefits: old-age pension, incapacity/invalidity pension, survivor’s pension and funeral 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 responsibility shared equally between employers and employees. Contribution rates will increase in stages as the NSSF pension program is implemented. The phases are as follows:

  • Phase 1: In years 1 through 5, total mandatory pension contributions will be 4% of the employee’s salary from the initial contribution start date.
  • Phase 2: In years 6 to 10, total mandatory pension contributions will be 8% of employees’ salary.
  • Phase 3: After the pension program has been in place for 10 years, total mandatory pension contributions will increase to 10.75% of employee salaries. There will be an additional increase of 2.75% after each subsequent 10-year period. (No information was provided as to whether there is a cap on future increases.)

The monthly salary used for the calculation of the NSSF contribution is capped at 1,200,000 KHR (approximately 300 USD).

Monthly pension contributions must be processed by the 15th of the following month. Therefore, for example, pension contributions for the month of March must be paid before April 15. Employers wishing to pay dues annually must submit an application to the NSSF for approval.

Employers are exempt from the obligation to make compulsory contributions for registered employees aged 60 and over. However, registered employees aged 60 and over on July 1, 2022 can make voluntary contributions by submitting a request to the CNSS within 12 months of the entry into force of Prakas No. 168 (i.e. until July 5, 2023).

Voluntary contributions

The NSSF Pension Scheme also allows for voluntary contributions if the NSSF member is:

  • Unemployed, aged under 60 and financially capable of continuing to contribute;
  • Be over 60 and intend to continue contributing; Where
  • Earning income above the salary cap of the mandatory system.

Voluntary contributions increase a member’s total contribution to the NSSF and ultimately will increase the future retirement benefits available to them. Contributions made under the voluntary system must equal or exceed contributions made under the mandatory system, and individual contributors must coordinate their voluntary payments directly with NSSF.

  • Key words: CNSS, pension system
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