Participate in social insurance without interest as savings?

Recently, on social networks, there has been a lot of information shared about comparing savings deposits as more beneficial than paying social insurance, affecting the psychology of workers.

According to these calculations, if you do not pay social insurance but save this amount for 30-40 years, the monthly interest, not including the principal savings, will be more than the pension.

Another calculation is given: “Assume your salary is 5 million, then you pay 8% of your salary, the company pays 18% of your salary. Each month you and the company pay 26% of your salary = 1.3 million. In year 1 you have 13 million; in year 2 you pay an additional 13 million + 13 million in year 1 + 6% interest of 13 million in year 1 = 26,780,000 VND. In year 3 you have 41,386,800 VND…

You start working at 25 years old, retire at 65 years old. You pay social insurance for 30 years (assuming you stop working for 10 years). By the 30th year, you have 1 billion 27 million. The monthly interest is 5 million 135,000 VND. But you only receive from social insurance 75% of your salary = 3.75 million/month. So, you do not receive enough interest and lose the principal.

Join social insurance to have "support" when you get old.

Regarding this issue, Mr. Bui Sy Loi - Deputy Chairman of the National Assembly's Committee on Social Affairs analyzed: Looking at the numbers, it can be seen that, in some ways, saving is better than participating in social insurance. But when employees participate in the social insurance fund, they contribute 8%, while the state and enterprises contribute 18%.

When participating in social insurance, workers not only receive pensions or death benefits, but also enjoy health insurance policies. This is a very humane policy of our society. According to the law, the state protects when the nominal salary received by retirees is devalued, causing the purchasing power of money to decrease, the state compensates to ensure the true value of the retiree's salary. Moreover, when the economy develops, we also adjust pensions to improve the lives of retirees.

"The nature of this issue is very humane, we cannot compare saving with participating in social insurance policies" - Mr. Bui Sy Loi said.

Social insurance participants pay 22% but they pay on an income level of their choice, which can be equal to the minimum wage and later can be equal to the poverty reduction standard in rural areas. In principle, when participating in social insurance, you pay and receive, pay more and receive more, pay less and receive less.

“If they do not participate in social insurance, employees will not be able to take the company’s contribution to “pocket” because the 14% amount that the company will have to pay corporate income tax on. If they pay into the social insurance fund, the company will count it as a business expense,” Mr. Bui Sy Loi further explained.

With voluntary social insurance, workers are only entitled to two policies: retirement and death benefits. When they get old, in addition to receiving pensions from voluntary social insurance, they are still entitled to health insurance policies. "When we get old, we see that health care is an extremely important issue, the cost of health care is much larger than the cost of food, clothing, housing and transportation" - Mr. Loi said.

Further analyzing the benefits of participating in voluntary social insurance, according to Mr. Bui Sy Loi, in addition to receiving pension, if an employee unfortunately passes away, he or she will still receive death benefits for the relatives of that employee and health insurance policy.

According to experts' calculations, with the current regulations on social insurance contributions and benefits, the accumulated amount of money (including interest) for a worker participating in social insurance is only enough to pay for his/her own pension for 8-10 years. Thus, with the life expectancy of those who live after the age of 55 for women and 60 for men currently being about 20 years, it is clear that the benefits that workers enjoy are very large.

According to VOV