Wednesday, October 26 2016


Changes made to social insurance law

Update: April, 13/2015 - 09:55

Bui Sy Loi, vice chairperson of the NA Committee on Social Affairs, spoke to Voice of Viet Nam about changes to the Law on Social Insurance.

In your opinion, what did lawmakers compiling Article 60 of the Law on Social Insurance aim to achieve?

The key objective of the Article 60 is to increase the number of employees receiving pensions when they retire. In February last year, National Assembly deputies unanimously adopted an amendment to Article 55 to prevent employees from getting lump-sum social insurance payments when they quit their jobs.

The drafting committee argued that the amendment proposed by the Government was based on six years' experiences in implementing the 2006 Law on Social Insurance. It said in the period from 2007-2012, about 80 per cent of pensioners got lump-sum payments, while only 20 per cent received a monthly pension. On average, about 500,000 pensioners get lump-sum payments each year. But the figure increases every year.

The Government and National Assembly wish that more employees participate in social insurance for long-run social security. This is totally in line with the 2013 Constitution that Vietnamese citizens have a right to be covered by social insurance.

Will you elaborate on the idea that the change made in the 2014 Law on Social Insurance is aimed to protect pensioners' benefits?

In reality, many employees receiving lump-sum payment in the past have expressed a wish to return the money to the Social Insurance Fund and then continue to pay monthly social insurance so that they can have monthly pension when they retire. But that law does not allow retro action.

While drafting Article 60 of the 2014 Law on Social Insurance, people able to receive lump-sum payments were narrowed down and recipients focused mainly on people with acute diseases, including ulcers, AIDs and leprosy. The key objective is to narrow down the number of employees receiving lump-sum payments and increase the number of monthly pensioners. This is the best way to ensure long-term social security for employees.

If a pensioner dies, under the law they will receive a sum of money equal to 10 months of his/her basic salary for their funeral service and other expenses. In addition, their relatives will receive a death benefit lump sum or monthly benefit.

Under Article 61, employees can pay their social insurance in instalments until they meet conditions to receive their monthly pension.

Will you explain why many employees working in industrial parks petitioned the Government to let them have a lump-sum social insurance allowance payment when they quite their jobs?

First, I would like to share with them the difficulties they are facing in life. However, here I just want to reiterate that the main purpose of social security is to protect the best interests of employees when they retire from work.

As you all know, under the law, each employee has to pay 22 per cent of his or her monthly wage or salary to the insurance fund. But in reality, the employee has to pay only eight per cent. The other 14 per cent is paid by their employer.

Our social insurance is gearing towards the objective of universal coverage. It is under strict management by the Government to ensure it will continue.

The policy on lump-sum payments written in Article 60 of the 2014 Social Insurance Law is in favour of employees' benefits. However, in the context of our labour market, living conditions for employees, particularly those who work in industrial parks (IPs), can still be difficult.

The minimum wage in Region Four is only able to cover about 70 per cent of minimum daily requirements. In addition, most of employees come from rural areas. They want to work for several years in IPs to earn money and then go back to their original homes. That's why they prefer to have lump-sum payments. This is a legitimate wish.

Taking note of the workers' request, the Government has agreed to ask the National Assembly to amend the law to allow eligible workers to get lump-sum social insurance payments if their periods of social insurance participation for receiving a pension are not met. What's your position on the proposal?

I support the Government's proposal to change Article 60 to allow workers to have more choices. However, as an expert on social insurance, I suggest workers should think carefully before making their final decision. Pensions are an effective shield to protect the workers from their risks in their old age. — VNS

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