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Social security policies play major role in development

Update: September, 01/2012 - 10:06

Chairwoman of the National Assembly Committee for Social Affairs Truong Thi Mai spoke to the Viet Nam Economic Times about the country's social welfare system

How should the social security system be organised so that it can work effectively in the context of Viet Nam's socio-economic development?

Every country during its economic development has to pay certain attention to social security policies. This is a prerequisite for guaranteeing sustainable development. In Viet Nam, we have a very diversified and flexible social security system. There are policies that are wholly funded by the State, such as the social support programme, and there are policies for which both the State and its citizens contribute to, such as programmes for the poor, though the poor also have to make efforts to get themselves out of poverty. There are also insurance policies for which individuals pay provisions in compliance with current legislation. Such diversity also applies to policies related to social insurance or health insurance.

Apart from making statutory social insurance contributions, enterprises are also encouraged to participate in retirement pension insurance schemes. This specific provision should not be maintained by enterprises themselves but transferred to a special bank account. The bank is liable to make payment to the employee when they retire in case their enterprise faces financial trouble or becomes bankrupt. As we are preparing to make amendments to the Social Insurance Law, we will take a close look at this issue.

You once said that people should take social insurance policies, particularly retirement pension insurance, so that it becomes the pillar of the whole social security system. Why is that?

We have made considerable progress in implementing social insurance policies.

Like many other countries in the world, Viet Nam is heading towards developing retirement pension insurance as the main pillar of its whole social security system.

Compared to health insurance, unemployment insurance or occupational accident insurance, which are short-term (on an annual basis), retirement pension insurance is a long-term type. The insurance is accumulated over an employee's lifetime, even when they are at work. Under this policy, when the beneficiaries lose their ability to work, they will be compensated.

As of now, only 10.1 million out of 14 to 15 million employees currently tied

to labour relations have taken out retirement pension insurance. Therefore,

the important goal over the next 10 years is to increase the number of policy participants. If the ratio of employees participating in the social insurance schemes is low, the State has to bear responsibility to take care of them once they retire.

In the upcoming time, the Government and National Assembly are going to thoroughly review existing insurance policies to make amendments to the Social Insurance Law. This is to ensure that after 2020, social insurance policies are more sustainable and maintain a balance between provisions and benefits.

Social security policies in Viet Nam are inextricably linked with poverty reduction and hunger eradication. While the line between poor and near-poor people is thin, the gap in the supporting policies for these groups is quite large. What can be done to help near-poor people out of poverty for good?

From 1996 to 2010, we successfully lifted 15 million people out of poverty. The poverty rate decreased from 40 per cent to less than 10 per cent. That is such remarkable progress.

However, the main goal, and also the biggest challenge, for Viet Nam is to find ways to implement poverty reduction in a sustainable way in which the poor, once lifted out of poverty, never fall back into it again.

I agree that the line between the two groups (mostly residents in remote villages in far-flung areas) is very thin, yet there is quite a big difference in supporting policies.

For example, when it comes to health insurance, the poor are covered 100 per cent by the State while near-poor people are only covered for up to 70 per cent. But even at that ratio, near-poor people still have limited access to health insurance.

That's why it's important to apply a number of policies that are normally for the poor so that near-poor people can also get out of poverty completely. — VNS

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