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​Additional pension fund built in Vietnam

On 21/6, in Hanoi, Ministry of Labor, War Invalids and Social Affairs coordinated with Malakoff Médéric Insurance Group (France) to organize a workshop on "Building additional pension fund, the proposals for Vietnam ".


Deputy Minister of Labor, War Invalids and Social Affairs Pham Minh Huan said Law onSocial Insurance (SI) was set up as the legal basis for implementation of social insurance in Vietnam, enabling employees in the formal and informal sector to participate in social insurance and enjoy pension. But besides the achievements, there are still many shortcomings: the social insurance system is fragmented; retirees’ life is difficult with the averaged amount of pension of 3 million / month, which is not enough to cover their lives; employees working for large corporations are not entitled to additional pension fund because it is not available in Vietnam...
 
The opinions about policy making and the establishment of additional pension funds were presented by the French experts at the workshop, which contributed to build the coming Law on Social Insurance (revised) and the preparation process of establishing some pilot areas to implement the additional fund.
 
Experts of Malakoff Médéric Insurance Group pointed out that additional pension funds play an important role in the improvement of the current retirement pension rate for employees, overcoming the defragmentation of the current social insurance system. Whereby, close relationships between employees and enterprises are created, which help mett the needs of enterprises’ requirement, contribute to the development of capital market, and promote the process of international economic integration. The experience of most countries in the World when setting up a legal framework for additional pension funds is to follow a certain route: deploying pilot program, implementing optional responsibilities of enterprises, implementing obligation of business ... it was stated at the workshop that the designing and building additional pension fund in Vietnam needs to suit the financial capacity of enterprises and ensure harmonious relations with the other policies. Funds must be able to be sustained over time, adaptable to any event; and resistant to economic and demographic shock.
 
The Workshop also posed some problems when building the additional pension fund in Vietnam: identifying the participants of additional pension fund, what is the role of the state to additional pension fund; whether it should be paid at minimum or maximum level; whether it is only for the purposes of pension or flexible for other purposes; what the management mechanism of closure – enjoyment is like.
 
As expected, the schedule of building additional pension fund in Vietnam will be divided into 3 phases. Phase 1 (2012-2015): forming a legal framework, implementing pilot program with some corporations, domestic and foreign enterprises; monitoring the operation and implementation of necessary improvements to complete the system. Phase 2 (2015-2020): completing the legal framework and attracting more participants to the additional pension fund. Phase 3 (from 2020 onwards): conducting researches for the change in paradigm of additional pension fund from optional to obligatory. /.

Source: Vietnam News Agency

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