Workshop on pension policy and recommendations on social insurance law reform

The National Assembly, together with UNDP and the ILO, organised a workshop on September 6 to consider pension reform options. The event was chaired by the deputies of the Social Affairs and Budget and Finance Committees of the National Assembly. National and international experts offered their recommendations on amendments to the revised Social Insurance Law, which will be submitted to the 13th National Assembly at its seventh and eighth sessions in 2014 for adoption.

The ILO shared the worrying findings of the actuarial valuation of the pension fund. By 2021, the Vietnamese Social Security (VSS) Agency's expenditure would be higher than its income. By 2034, VSS funds would be depleted. This projection is slightly more negative than a previous exercise carried out by VSS -which projected the fund depletion by 2037-, but both reports show a very similar picture: the need for urgent reform.

Mr. Tran Van, Vice Chairman of the Financial and Budgetary Committee, and Mr. Loi, Vice Chairman of the Social Affairs Committee, agreed that an increase of the retirement age will be necessary. Nevertheless, the reform has to be carried out carefully, to avoid disruptions in the labour market.

Some pending questions for the reform: will current contributors be affected by the reform or only new entrants? Is the current proposed formula sustainable? Will inflation or salary increase used to revalorise past salaries?