India may soon have a social security pact with the UK as an in-built component of the free trade agreement (FTA) which has been finalised between the two countries, a source said on Wednesday. The source said that from now onwards, the social security agreement (SSA) will be an in-built component of all free trade agreements to be negotiated in future.
“UK is believed to have agreed on the social security component under the FTA negotiations, which would be ratified in the near future,” the source said. The SSA, a reciprocal arrangement between two or more countries, ensures that an employee while on a foreign assignment does not have to contribute to the social security coverage fund in that country but get the full benefit of employment period for pension calculation, while the employers are saved from making double social security contributions on behalf of their workers. The Indian employees posted abroad or on foreign assignment are required to obtain a certificate of coverage (CoC) from retirement fund body EPFO, which helps them avoid paying social security contribution in countries where they are posted.
The Employees Provident Fund Organisation (EPFO) has been authorised to issue the Certificate of Coverage to employees posted in nations that have signed an agreement with India.