The Vietnamese Ministry of Labor, War Invalids and Social Affairs is collecting people’s opinions on the draft Law on Social Insurance (amended), which proposes to reduce the year of social insurance contributions from 20 to 15 years to enjoy a minimum pension of 45%.
Nguyen Duy Cuong, Deputy Director of the Social Insurance Department of the Ministry of Labor, Invalids and Social Affairs said to the media that this regulation is intended to create opportunities for late participants, who are already 45-47 years old when starting the contribution. This is also beneficial to employees who participate intermittently and do not accumulate enough 20 years of social insurance contributions at the time of retirement.
These cases will now receive a monthly pension while would not previously be entitled to a pension according to the Social Insurance Law 2014. However, as regulated in the Law, employees participating in social insurance for 15 years will receive a low pension. For example, many businesses are contributing to social insurance for employees only slightly higher than the regional minimum wage, fluctuating VND 5 million, then the minimum pension is only 45% of the average payment during the process, which is only about VND 2 million.
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| The proposal to reduce the year of paying social insurance contributions is one of the solutions to ensure an increase in the number of people staying in the social insurance system to enjoy their pensions. (Photo: Thoi Dai) |
“For people who pay social insurance for 15 years, the pension may be low, but it is still better than none. In addition, they are also entitled to free health insurance card”, said Cuong. He also added that pensions are adjusted annually by the Government based on the increase in the consumer price index and the ability to balance the budget.
The draft Law on Social Insurance (amended) also adds regulations on calculating the pension rate for those who have paid social insurance contributions for less than 20 years in accordance with the amendments to the conditions for pension enjoyment and the signing and participation in the provisions of the international treaties.
Statistics of the Vietnamese Ministry of Labor, War Invalids and Social Affairs show that there are currently about 20,000 people reaching retirement age but not meeting the number of years of contributions that have chosen to make a lump-sum contribution to enjoy pension. Meanwhile, about 300,000 people who have contributed for 10 years or more until retirement age are not eligible for pension.
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