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Lump-sum pensions for review

Update: May, 19/2015 - 08:36
These workers, used to working long hours and unsure about the future, argued that they wouldn't be able to accumulate 20 years of payment and so demanded that their pensions come in a one-time lump sum. — Photo vnexpress

HA NOI (VNS) — Deputy Minister of Labour, Invalids and Social Affairs Pham Minh Huan said workers should reconsider demands for a one-time pension payment since a monthly pension plan may actually benefit them more, but that talks about amending Article 60 of the 2014 social insurance law would move forward.

The ministry will meet with the National Assembly's Committee on Social Affairs today to discuss Article 60, which caused recent friction because it enforces that pension plans provide only monthly payments, from retirement through the rest of workers' life, if they paid social insurance for a total of 20 years.

Workers at PouYuen Vietnam – a footwear factory in HCM City's Binh Tan District - went on strike in late March for several days to protest the lack of option.

These workers, used to working long hours and unsure about the future, argued that they wouldn't be able to accumulate 20 years of payment and so demanded that their pensions come in a one-time lump sum.

Deputy Minister Huan assured concerned workers that the ministry had already proposed an amendment to the 2014 social insurance law that would reinstate the one-time lump sum option.

Huan, however, pressed the opinion that monthly pension plans are more beneficial in the long run.

For instance, if a 60-year-old worker chooses a monthly pension plan, and he lives till 78 years, he will receive up to VND516 million (US$23,800) in total. If he chooses to take the one-time payment, he will receive only VND124 million ($6,000), Huan said.

While understanding that workers have the right to choose a lump sum, Huan said this one-time payment would only help them with immediate problems, but would not serve them in when dealing with future problems.

He added that if the National Assembly approves the amendment proposal, agencies and social insurance workers should actively inform workers about the pros and cons of a one-time payment. — VNS


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