The Government has proposed the National Assembly revise Article 60 of the Law on Social Insurance in the wake of the March worker protests against it. What is this article about? It does not allow workers to get a lump-sum social insurance payout after they quit their job. Instead, they will have to wait until they retire so that they can get pensions.

Many of the thousands of protestors at Pouyuen Vietnam Co. Ltd., a Taiwanese-invested maker of sport shoes and garments in HCMC, reasoned they might not return to the life of a factory worker after they quit. Some savings are enough for them to start up family business in their rural hometowns, or they want to get back to the field due to the tough working conditions at factories. So there is no reason for them to wait until their retirement age.

At the height of the worker protests against the law, which has yet to come into force, the Government promised to ask the National Assembly to change Article 60 in a way that offers workers two options. One is laborers can take a lump-sum social insurance payout after one year of unemployment, and the other is that they can continue paying social insurance premiums voluntarily or through their new employers and receive pensions upon retirement. Under Vietnam’s current regulations, the retirement age is 60 for men and 55 for women.
The Government approach reflects what most of the strikers expected.

The issue has heated up again during discussions at the ongoing NA session. Some back the present content of Article 60 as it is aligned with the Party and State 2015 goal of providing social insurance coverage for half of the work force, so that they can have stable incomes after retirement. A great number of people are working in the private sector where wages are low and jobs are not stable. Therefore, many of them are inclined to work for a certain period only to save some money but the lump-sum amount they get is too small to set up a business. 

However, a majority of deputies supported an amendment to the law to meet workers’ expectations. Or at least they can choose to get either a lump-sum amount after loss of a job or a monthly pension after retirement.

The president of the Vietnam General Confederation of Labor, Dang Ngoc Tung, says in Tuoi Tre that in reality certain struggling workers want to get a lump-sum social insurance payout upon resignation, instead of waiting until they retire. They can use this money to pay for their urgent needs or invest in a business.

“I think that most NA deputies will approve the Government’s proposal to amend the law,” Tung adds.

Chairwoman of the HCMC’s People’s Council Nguyen Thi Quyet Tam says in Vietnam News that during her meetings with people ahead of the NA sitting, workers said that in many tough occupations, those over 40 years old often always run the risk of losing their job because of their poor health.

“In addition, most employees come from rural areas. They rely on low pay to cover accommodation, raising children, and paying for food, water and electricity. Their savings are modest, so they want a lump-sum amount,” said Tam.

Vo Thi Dung, chairwoman of the HCMC Fatherland Front Committee, is quoted by Tuoi Tre as saying that the NA should take the blame for adopting a revised law that prevents workers from receiving a lump-sum social insurance payout after leaving their job.

“I felt ashamed and guilty to see workers going on strike in protest against Article 60 of the 2014 Law on Social Insurance,” Dung says.

But Minister of Labor, Invalids, and Social Affairs Pham Thi Hai Chuyen says that any policy or regulation must ensure the legitimate rights and interests of both the employee and the employer. The NA should listen to different views and discuss them carefully before amending Article 60.

More educational campaigns should be conducted to help workers understand the pros and cons of the two options with a view to having more workers choosing to receive pensions.
Truong Trong Nghia, a deputy from HCMC, says in Nguoi Lao Dong that in certain cases, lawmakers should devise rules that offer options for people to choose to comply with the laws.

“Lawmakers should avoid unnecessarily imposing regulations on people. Workers could encounter mishaps anytime, so they would like to choose an option that benefits them most. Besides, any educational campaigns are no better than the Government’s effort to develop a strong and sustainable economy, thus encouraging more employees to choose to get pensions,” Nghia says.