Thursday, October 22 2020

VietNamNews

Should Việt Nam have a lump sum pension payment policy?

Update: May, 11/2020 - 11:06

Hà Nam post office workers have been personally delivering monthly pensions and social insurance payments since April 16. — VNA/VNS Photo Đại Nghĩa

Đinh Thị Thu Hiền, vice chairwoman of the Social Welfare Policy Committee, under the Ministry of Labour, War Invalids and Social Affairs, talks to Nhân Dân (People) newspaper on the need to revise the policy on lump-sum pension payments

Do you have any comments on the increasing number of people requesting the lump-sum pension payouts due to economic hardship caused by the COVID-19 pandemic?

In the current context of the COVID-19 pandemic, many Vietnamese working people have found themselves in a lot of difficulties in supporting their families as they are now out of work, given many industries and businesses have been hit by closures, reduced orders and supply-demand chain disruptions. Many of them have decided to withdraw their contributions as a lump-sum pension payout to have money to cover their families’ expenses during the pandemic, instead of receiving the monthly distributions when they retire.

However, we have advised them to think carefully before making a decision as the pension scheme serves as a safeguard for themselves and their families when they are old.

In the last few years, quite a few pensioners have pawned their pension books when they desperately need cash. What advice should local social security agencies give them?

We, at the Việt Nam Social Security and local social security agencies, have always advised people they should not pawn their social security books when they need cash as the money they would receive is much smaller than the real sum they will receive when they complete their participation in the social security scheme.

In the present context of the COVID-19 pandemic, in early April, some people in the southern province of Bình Dương created a fake Facebook account to buy social security books from people who needed money. Upon detecting this fraud, we immediately contacted the Ministry of Public Security and asked them to work with us to stop this from happening.

At the same time, the Việt Nam Social Security has also asked all its local branches to advise all holders of social security books not to sell their pension books when they need money. What’s more important, holders of social security books will also enjoy the value added to their pension based on the inflation rate of the consumer index as well as the capacity of the National Social Insurance Fund and the State budget.

Under the law, employees who have made social insurance contributions of more than 30 years for men and 25 years for women are entitled to an old age grant equal to 0.5 per cent of their average salary multiplied by the extra four years of contribution.

For those ineligible for a pension, a lump-sum allowance will be granted depending on years of his or her social insurance contribution. For each year, employees are entitled to one and a half times their average monthly salary. — VNS

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