Increasing retirement age: How to increase it while still calling for staff reduction?

We cannot extend the retirement age while calling for a reduction in the number of state employees.

The Ministry of Labor, Invalids and Social Affairs is studying to propose increasing the retirement age in the revision of the Labor Code to be submitted to the National Assembly in 2017. Accordingly, the retirement age for women will increase to 58 and for men to 62. However, this issue has received mixed opinions from the public.

Speaking to VOV.VN reporter, Ms. Pham Tuyet Nhung, Deputy Head of the External Relations Department - Central Committee of the Vietnam Association of the Elderly, said that this is a necessary move, because in the context of the pension fund having many risks such as: input does not meet the payment level, payment to some pension beneficiaries is not fair and not sustainable. The Government must have a policy to deal with this situation.

The Ministry of Labor, Invalids and Social Affairs is one of the agencies in charge of this issue, so it is inevitable to research, evaluate and propose policies. Therefore, the proposal to increase the retirement age is one of the things they have evaluated and researched. This is a very sensitive issue, so it is of great public interest.

Ms. Pham Tuyet Nhung

Raising the retirement age does not affect the entire economy

PV: What do you think about the proposal to increase the retirement age?

Ms. Pham Tuyet Nhung:I think, first, the retirement age has a major impact on the state-paid workforce. According to a report by the International Labor Organization (ILO), Vietnam currently has a workforce of about 18 million people, while the state sector accounts for only about 30%.

This number is not much compared to the entire labor force of the country. For the private sector, foreign enterprises, the informal sector… they do not have a retirement age. So we have to consider the impact of age to what extent. Many people think it affects the entire economy, leading to misunderstanding.

Second, according to ILO data, in the state sector, male workers account for 3/4 (about 70%), with a small number of women. However, it is considered that women must retire early, otherwise it will affect the opportunities of others. I think that is unreasonable.

In my opinion, although men and women have different characteristics in terms of biology, physiology, ability... But when women do their job properly, I don't think that at the age of 55 they are weaker than men of the same age. Their working capacity is still the same, the only difference is that women's obligations to the family are heavier. Therefore, if they come home early to take care of their children and grandchildren, it will be more suitable for families and societies that are still "small-scale economies" like ours. But if we use health reasons, prioritize women... and let them come home early, that is an incorrect point of view and somewhat gender inequality.

Third, in the present era, along with economic progress, higher living standards, better medicine, the population is aging faster, the number of elderly people is increasing. At the same time, with the number of elderly people (NCT) increasing, life expectancy is increasing, the quality of life of the elderly is also increasing.

For example, the elderly in 2016 at the age of 60 are healthier, more alert, and more capable than those of decades ago; their ability to work is also different. That is why in developed countries, they retire at the age of 65 and 67 - because then people will consider whether there is a decline or not, not just calculate like in the past.

Raising the retirement age means establishing appropriate and flexible policies (Illustration photo)

In the past, 50 years old was considered a veteran, now 70 is still healthy and the elderly are not the same. The elderly start to be counted from 60 - 80. People from 60 - 70 years old are completely different from people from 70 - 80 years old and even more different from people from 80 years old and later. Therefore, many elderly people after retirement, if they have qualifications, knowledge... they still continue to work. According to data, 70% of the elderly are still working and many people work in the informal sector such as animal husbandry, farming...

Fourth, while wanting to establish a correct and appropriate policy, it must be consistent and specific. It is impossible to calculate the same professions and qualifications. For example, a person who finishes university, then gets a master's degree, a doctorate, becomes a professor, goes on an internship... may not finish his studies until he is 45 years old. So how much do they contribute? How many workers are needed to have one person like that? If we follow the pattern of forcing him to retire at the age of 60, it is a huge waste for society.

I think he is not sad, because if he retires from one place, he will stay in another place and “earn two salaries”. But if a worker in the garment, rubber, or seafood processing industry, for example, starts working at the age of 18. By the age of 30-35, he has many illnesses. If these people are “forced” to retire from the age of 55-60, it is unreasonable. Therefore, the policy must be flexible, adaptable, and specific to create fairness and feasibility in calculating retirement age.

How to increase retirement age and reduce staff at the same time?

PV:We propose to increase the retirement age while unemployment is still high and the pension fund is at risk of bankruptcy... How do you think we can balance this issue?

Ms. Pham Tuyet Nhung:It is true that in our current economy, the unemployment rate is high, employment is actually very difficult, and increasing pensions is also a huge challenge for the Government. Therefore, to solve this problem, we still have to solve the problem of employment and the economy.

We cannot extend the retirement age while calling for a reduction in the number of civil servants. So how to resolve this contradiction? Therefore, we must take into account the reality and at the same time have policies for qualified retirees. I do not agree with the view of giving them preferential treatment, but rather using and taking advantage of them so that they can contribute to the country. We do not need someone to sit in a high position to receive many benefits and benefits.

Now, if we talk about increasing the retirement age, how many people will be affected? Will it overlap with the reduction of staff? Will it be related to the pension fund? I still think that there must be a reform in the pension system. Because the current pension system is not fair and not sustainable. It is shown in the fact that life expectancy is high now, there are people who work from the age of 18, retire at 45 and live to 90, who will pay the taxes to pay?

In a largely informal economy, how can we collect taxes and there is no social insurance? The same goes for the armed forces: early retirement, high salary. So can we reform? Countries have applied the “multi-pillar” system, meaning that if you contribute more, you get more, if you contribute less, you get less. So we definitely need to reform. However, it is not necessary to start by increasing the retirement age immediately, but there should be a gradual arrangement and the retirement age will increase at some point, but it must be synchronized with other systems to stabilize the pension system.

PV: Some people say that we should not use the risk of pension fund bankruptcy as an excuse to increase the retirement age. What is your opinion?

Ms. Pham Tuyet Nhung:I understand that the current pension and social insurance system is “problematic”. According to the calculations of the Ministry of Labor, Invalids and Social Affairs a few years ago, it will be exhausted by 2032. If so, where will we get the money to meet the demand? At that time, the elderly population in Vietnam could reach 15-16%, and double by 2038.

The question is, will the fund go bankrupt? As someone who has been following it, I think it will go bankrupt if it is not reformed. What should we do now? Other countries have done a lot, we have to learn from them: First, increase the coverage of social insurance, which means there must be voluntary insurance, compulsory insurance, insurance in the private sector; there must be sanctions; workers must see that they have benefits in it.

Second, we must make the income of beneficiaries of the pension and social insurance system more equitable. It is not that many people contribute for a few people. Third, we must generate benefits from the social insurance contribution source so that the money can generate profit. Fourth, of course, we must reform the system, including the retirement age.

PV:Thank you!./.

According to VOV