The issuance of Circular Number 5/2026 raises significant concerns about the premature remittance of social insurance benefits without proper registration and regulatory frameworks in place. The National Social Insurance Fund (NSIF) Act became effective on December 21, 2023, intending to establish a national social insurance scheme for private sector employees.
Before this development, employers expected to register under the NSIF Act. They needed to obtain a registration certificate as per Section 25. However, no employers or employees have registered under the NSIF Act yet.
The decisive moment came with Circular Number 5/2026, which annulled Circular Number 03/2010. This change has immediate implications for employee contributions and retirement benefits, particularly since contributions made before the NSIF Act are ineligible for remittance to the Fund.
As it stands, Section 42 of the NSIF Act mandates that employees must make 180 monthly contributions to qualify for retirement pension benefits. Yet, without registration and enabling regulations, many employees may find themselves unqualified.
Experts express concern over the situation. Riek James Doar stated that “Circular Number 5/2026 appears to be premature, as critical mandatory preliminary steps essential for the remittance of social insurance benefits to the Fund remain incomplete.” This highlights the urgency of establishing a comprehensive regulatory framework.
Additionally, there are uncertainties regarding the authority of the Undersecretary in issuing Circular Number 5/2026. Officials have not clarified whether the necessary steps for operationalizing the NSIF have been completed.
The Ministry of Labour has suggested that it might take three to five years to undertake necessary steps for effective implementation. Until then, employees remain at risk of losing out on their entitled benefits due to these procedural delays.
