Vietnam urged to expand social insurance coverage, limit lump-sum claims
Experts have recommended Vietnam work to expand the coverage of social insurance and limit the number of people claiming lump-sum payments.
Addressing a seminar in Hanoi on April 27, Le Hung Son, Deputy General Director of the Vietnam Social Security, noted that the 7th meeting of the 12th-tenure Party Central Committee issued Resolution No. 28-NQ/TW on reforming the social insurance policy so as to turn social insurance into a truly main pillar of the country’s social security system and gradually expand its coverage towards universal social insurance coverage.
According to the International Labour Organisation (ILO), this resolution features many progressive regulations that approach the social security standards in international conventions and the ILO’s recommendations. Therefore, to institutionalise the Party and State’s viewpoints stated in the resolution, it is necessary to amend and supplement many relevant legal documents, including the Social Insurance Law, in a road map matching the country’s socio-economic conditions.
Robert J. Palacios, a social security expert for East Asia and the Pacific at the World Bank, said amending the Social Insurance Law is highly important, noting that Vietnam has the fastest population aging speed in Asia, and that is why social insurance coverage needs to be expanded and the law revised.
Vietnam should increase measures for raising the rate of participants in the social insurance system, he noted.
Christophe Lemiere, Programme Leader for Human Development for Vietnam at the WB, attributed the modest participation in compulsory social insurance in the country partly to the long minimum time of insurance contribution needed to claim pensions (20 years).
Vietnam is also the only country to allow workers to claim lump sums, which has boosted pressure on the social security system, he said, pointing out that the State has also had to provide income support for a large number of elder people not taking part in the system.
If the Social Insurance Law expands the groups subject to compulsory social insurance to all salary earners (the public sector, private companies, and business households), the number of participants in social insurance will also grow.
The Government should also limit the number of people claiming lump-sum payments while covering 30% - 50% of voluntary insurance premiums for low-income earners. Only by doing so can Vietnam reach the target of 60% of its workforce participating in social insurance by 2030, Lemiere added.
