2 August, 2022On 28 July, the Cambodian government launched a new pension scheme for private sector workers, strengthening social protection for garment workers in the country.
The minister of labour and vocational training announced that the pension scheme, which is a part of the National Social Security Fund (NSSF), will be implemented on 1 October.
For the first five years, a private sector employee and his or her employer are required to contribute 2 per cent of the wages each to the pension fund. The rate increases to 4 percent from the employee and 4 percent from the employer respectively. An additional 2.75 per cent will be added to the employee and employer’s contribution respectively for each subsequent 10 years.
According to the ministry, the employee will begin to receive the pension payment after he or she reaches 60 years old, the amount is calculated based on the employee’s last drawn salary six months before retirement.
Athit Kong, president of the Coalition of Cambodian Apparel Workers Democratic Union (CCAWDU) explained that,
“The pension scheme is an additional benefit and opportunity for workers in a private Company. And the majority of workers welcome it but they need more awareness raising.”
Christina Hajagos-Clausen, IndustriALL director of textile and garment industry, expressed that,
“Social protection is a human right and designed to reduce and prevent poverty and vulnerability throughout the life cycle. Cambodia’s new pension scheme is a positive step forward in strengthening social protection for garment workers.”
Recently, IndustriALL and ILR School's New Conversation Project launched a research report titled "Security for Apparel Workers : Alternative Models".
The report points out the inadequate social protection system in apparel-producing countries. IndustriALL’s textile and garment sector has used the report’s finding to launch a campaign for stronger social protection in order to mitigate future crises such as Covid 19 and to ensure income security for apparel workers. (Investor brief)