Researching changes to pension calculation methods.
According to Deputy Minister of Labour, Invalids and Social Affairs Pham Minh Huan, the pension fund in Vietnam could be depleted by 2029 if the pension system is not reformed.
Workshop "Financial Assessment of Pension Funds in Vietnam - Forecast Results"
and recommendations.” - Photo: VGP/Thu Cúc
Deputy Minister Pham Minh Huan made this statement at the workshop "Financial Assessment of Pension Funds in Vietnam - Forecast Results and Recommendations" organized by the Ministry of Labour, Invalids and Social Affairs in collaboration with the International Labour Organization (ILO) in Vietnam.
At the workshop, delegates presented financial forecasts for the current pension program of Vietnam Social Security and argued that gradually increasing the retirement age is a solution to balance the fund's revenue and expenditure, along with revising the pension calculation method to increase the long-term sustainability of the pension fund.
Carlos Galian, an ILO expert in Vietnam, stated that pension funds will begin to experience deficits from 2020 and could be depleted by 2029. This will pose a significant challenge to the Vietnamese economy.
According to a report by the Ministry of Labour, Invalids and Social Affairs, only about 20% of the workforce participates in social insurance in Vietnam. This rate may increase in the near future as Vietnam enters a period of demographic dividend, with the number of people of working age (15 years and older) accounting for 58.5% of the population.
However, Vietnam's population is aging rapidly, and a large proportion of the population will no longer receive social benefits in the future. Gradually raising the retirement age is considered an important measure to balance the fund's finances between revenue and expenditure.
According to Deputy Minister Pham Minh Huan, promoting and improving the social security system, with social insurance and pension schemes at its center, has always been a consistent policy and a guiding principle of the Vietnamese State throughout its development process. The National Assembly's legislative program for the 2011-2015 period will consider amending the Social Insurance Law to better reflect current realities.
Currently, over 10.1 million people participate in the mandatory social insurance scheme. All Vietnamese citizens with labor contracts of 3 months or more are eligible for social insurance. Public sector civil servants are also eligible for mandatory social insurance, and other Vietnamese citizens aged 15 to 55 (for women) and up to 60 (for men) who are not subject to mandatory social insurance can participate in voluntary social insurance.
According to (Chinhphu.vn) - LT
