The World Bank (WB)’s experts have suggested Việt Nam promptly reform its social insurance sector to ensure the stable balance between collection and spending in the mid-to long-term future.— VNA/VNS Photo Phương Hoa

HÀ NỘI — The World Bank (WB)’s experts have suggested Việt Nam promptly reform its social insurance sector to ensure the stable balance between collection and spending in the mid-to long-term future.

WB Country Director for Việt Nam Ousmane Dione and other WB experts had a working session with Deputy Prime Minister Vương Đình Huệ, who is also head of the central steering committee for reform of wage, social insurance and allowances for people with meritorious services, in Hà Nội on Thursday.

According to the experts, Việt Nam’s reforms in social insurance policy, which began in 2014, are not strong and visionary enough to deal with ongoing challenges.

They explained that the imbalance between collection and spending in Việt Nam’s social insurance sector is expected to increase from 1.7 per cent of the gross domestic product (GDP) to 3 per cent in the future, since there will be more beneficiaries.

The total asset of the Việt Nam Social Security (VSS) now accounts for 12 per cent of GDP.

However, the value is forecast to drop to zero from 2036-42.

At the same time, Việt Nam’s retirement system is facing many challenges due to the country’s rapidly aging population.

With this in mind, experts proposed strengthening the State retirement system managed by VSS They also encouraged increasing the involvement of the unofficial sector, as well as developing a fundamental social retirement pension fund for poverty reduction and gradually expanding the private retirement system.

Việt Nam should raise the retirement pension at a rate lower than that of wages and the adjust retirement pension in line with inflation, they said.

The retirement age should be increased and should also be equal between men and women, the experts said, emphasising the need for Việt Nam to reduce the retirement pension gap between the State and private sectors.

The experts also gave recommendations to Việt Nam on ensuring the stability of the financial system.

In reply, Deputy Prime Minister Huệ said the WB’s assessments would help the Vietnamese Government complete a project on social insurance reform which will be submitted to the Politburo during the upcoming seventh plenum of the Party Central Committee.

Huệ called on the WB to assist Việt Nam in training experts in financial forecasting, expressing his belief that with the support of the bank Việt Nam could successfully conduct the reform.— VNS