VietNamNet Bridge - "If wages continue to rise, it is forecast that by 2023, with about 10 million pensioners, the social insurance fund will have only enough money to pay retirement pension, not enough for investment," warned a senior official of the Ministry of Labor, War Invalids and Social Affairs.

 

 

On the afternoon of April 16, the National Assembly’s Committee for Social Affairs continued its plenary session to examine the Government's report on the management and use of social insurance funds in 2012.

The committee’s Deputy Chair – Mr. Bui Sy Loi – said that all three groups of workers who are eligible social insurers increased over the years, but still much lower than the potential. At the end of 2012, the total number of compulsory insurers rose by 3.3 percent (approximately 0.3 million), but the number was only equivalent to 78 percent of the actual number of laborers.

Loi said the revenues of the social insurance fund increased last year, 17.7 percent higher than the Government’s target. The total fund from voluntary social premium was about VND432 trillion ($20.57 billion). Unemployment premium highly increased, with the total amount of over VND24 billion ($1.1 billion). The number of people who enjoyed one-time social insurance benefits increased by 20 percent.

"On average, the number of compulsory social insurers rises by 0.3 million people a year, but the number of people who enjoyed one-time social insurance benefits doubles. This will affect social security in the future," he said.

Mr. Loi said in 2012 the authorities could not control the enterprises which are compulsory subjects to social insurance, especially the non-state sector.

"The debt of social security has improved but the social insurance fund has to pay more than its revenues. The average age for retirement is 53.4, lower than the provisions", he said, emphasizing that the fund is under pressure because of the burden of paying social insurance for early retirees under the personnel downsizing policy of state agencies.

The National Assembly’s Committee for Social Affairs’ Vice Chair -- Nguyen Van Tien -- worried that the social insurance fund to “be broken” in about 20 years. However, Deputy State Auditor General Le Minh Khai affirmed that the fund is under the influence of many factors so it is difficult to forecast when the fund is broken.

Director of the Department for Salaries, Wages of the Ministry of Labor, War Invalids and Social Affairs – Mr. Pham Minh Huan - said the fund’s balance is more than VND200 trillion at present but its payment is approximately VND100 trillion and compulsory salary of VND90 trillion.

"If wages continue to increase, with about 10 million pensioners in 2023, the fund will be enough for paying pension, not enough for investment. At present, 74 percent of the fund is used to buy government bonds and for state loans," said Huan.

The National Assembly’s Committee for Social Affairs’ Deputy Chair -- Bui Sy Loi -- said that the government should issue the social insurance development strategy to 2020 and adjust the retirement age to ensure the fund balance in the future.

Mai Lan