Draft revised Law on Social Insurance: Workers enjoy many beneficial policies

Solve immediate needs

The Ministry of Labor, War Invalids and Social Affairs has just submitted to the National Assembly the draft Law on Social Insurance (amended). This draft law will be discussed for the first time by the National Assembly at the upcoming session.

In the submission, the Government continues to present two options related to one-time social insurance at Point d, Clause 1, Article 70.

According to the Ministry of Labor, War Invalids and Social Affairs, statistics for the period 2016 - 2021 show that 4.06 million workers withdrew social insurance at once, while 4.2 million people joined new social insurance.

Thus, in terms of mathematics, for every 1,048 new participants, there is 1 person leaving the system. On average, each year nearly 700,000 people withdraw their social insurance at once, with the number each year higher than the previous year, an average growth rate of about 11.6%.

The Ministry of Labor, War Invalids and Social Affairs assessed that this is posing a challenge to the goal of ensuring social security and this is also the reason for the slow increase in pension coverage.

Of the total number of people who settle social insurance at one time, nearly 10% are people who have paid social insurance for 10 years or more.

Therefore, in this revised Draft Law on Social Insurance, the Ministry of Labor, War Invalids and Social Affairs proposes two options for withdrawing social insurance at one time.

Besides the option of keeping the current regulations, the option that is of public interest is to only withdraw a maximum of 50% of the total time contributed to the fund.

In addition, the remaining social insurance payment period is reserved so that employees can enjoy social insurance benefits when they reach retirement age.

According to Mr. Nguyen Duy Cuong, Deputy Director of the Department of Social Insurance, Ministry of Labor - Invalids and Social Affairs: The draft revised Law on Social Insurance proposes to only allow one-time withdrawal of social insurance for a maximum of no more than 50% of the total time contributed to the pension and death fund.

The withdrawal condition is that the employee must have paid social insurance for less than 20 years and not participated in compulsory or voluntary social insurance for 12 months.

For example, if an employee pays social insurance for 10 years, if they withdraw it at once, the amount will be calculated and the maximum payment period will be 5 years. The remaining amount will be reserved until retirement or accumulated if they continue to participate in social insurance later.

Mr. Cuong said that this plan of only allowing a maximum withdrawal of 50% helps workers have a certain amount of money to solve immediate difficulties and still have the conditions to continue participating in social insurance later to receive a pension.

Thus, with the new regulations in the Draft Law on Social Insurance (amended), employees have 4 options when reserving 50% of the payment period.

Specifically: If you continue to work and participate in social insurance, it will be accumulated until you have 20 years of contributions to receive a pension; in case the employee reaches retirement age but has not yet paid enough social insurance, he/she can choose to pay one time for the missing time to receive a pension; choose to receive a monthly pension; continue to withdraw social insurance one time when reaching retirement age.

Many benefits options for employees

According to labor and employment experts, the Draft Law on Social Insurance also offers many options and benefits for employees when continuing to participate in social insurance such as: Continuing to participate to receive pension or receive monthly retirement benefits earlier instead of waiting until age 80.

A notable point in the draft law is the regulation that when employees reach retirement age but do not meet the requirements on social insurance payment time to receive pension, they can choose to receive monthly allowance from the social insurance fund for the period before reaching the age to receive social retirement allowance.

This depends on their social insurance contribution period, salary, and monthly income. During the period of receiving monthly benefits, they are entitled to health insurance.

Option 2 on the conditions for one-time withdrawal of social insurance is essentially adding conditions to limit the withdrawal of social insurance, increase the number of pensioners and the budget will reduce support through monthly social allowances for the elderly group without pensions.

According to Mr. Tran Thanh Nhan - Director of Trateco Company, to attract employees to participate in social insurance, the Social Insurance Law needs to be on the side of employees.

Currently, the Social Insurance Law stipulates that the retirement age without a % deduction of pension is too high compared to the health of Vietnamese people, not only intellectual workers, but especially manual workers.

“In the market mechanism, businesses do not want to employ workers in the 55-62 age range because of high salaries, low productivity, slowness, stagnation, and high risk of job loss and elimination.

At that time, I didn’t know what job to apply for because of the age requirement. In addition, early retirement would result in a 2% deduction per year. So who would want to participate because they knew the end result would not be bright. So the retirement age should be reduced from 62/60 back to the old age,” Mr. Nhan stated his opinion.

Mr. Nhan added that the Social Insurance Law is related to social security, of which the most important is the retirement regime, so it needs to be carefully considered when amending this law.

Mr. Nhan stated the reality: "The regulation of 2% reduction for early retirement is unreasonable, it is necessary to regulate more beneficially for employees who participated in social insurance early"./.