In-depth
Draft regulation on retirement, pensions stir opposition
  • | VietNamNet, dtinews.vn | May 07, 2014 03:17 PM
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A draft regulation that proposes raising retirement ages and lowering pensions has stirred up opposition from the public.

A draft Law on Social Insurance complied by the Ministry of Labour, Invalids and Social Affairs (MoLISA) is planned to be submitted to the National Assembly in May and is expected to take effect January 1, 2015.

Under the draft regulation, beginning next year pensions for state workers would be calculated based on the average of their social insurances instead of the average of their last ten years salaries, lowering pensions for many.

 

Many want to keep current retirement age

The draft also suggests that the National Assembly vote for retirement ages. As a result, beginning in 2016, the retirement ages for state workers would be progressively increased. Beginning in 2020, the retirement ages for employees in the private sector would be also increased under the same plan.

Pham Minh Huan, Deputy Minister of Labour, Invalids and Social Affairs, said the proposed changes in retirement ages and pensions are to ensure fairness for all payers to social insurances and help to balance pension funds in the long-term.

“Current regulation has resulted in an imbalance in social insurance and pension payments,” he commented.

According to him, the number of pension benefactors has been sharply increased in recent years, up from 217 social insurance payers for each pension benefactor in 1996 to 14 for each benefactor in 2007 and 9.3 for each benefactor in 2012. He added that current policy makes for a shorter time workers pay into the system and a longer time collecting benefits. The situation has prompted state agencies to consider measures to prevent a possible breakdown of the pension system.

Concerns and opposition

The draft regulation has stirred up public opposition among members of the public who claim that it would be difficult for people, especially women, to work for more years because of the health problems faced by so many over the age of 50.

“Old people should retire from work in order to make way for young people to contribute the society,” one commented.

Some others suggest that those who are strong enough to work additional years should be continuously employed as advisers and be paid under labour contracts without social insurance payments.

Several members of the public recommended that any changes to policies should take into account the social effects, including the rate of unemployment rate among young people, health and family structure and the living standards of retired people, and not only focus on the safety of the insurance fund.

“If the social insurance fund is modest it is because nearly 60% of people subject to compulsory social insurance payments have yet to pay. State agencies should be first to blame for such lax management and they should take measures to urge the rest of people to pay social insurance instead of increasing retirement ages,” one person said.

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