Basic Contents of the Social Insurance and Retirement Law

mandatory, this age reduction is reflected in the law allowing them to retire at an earlier age than the general regulation but without having to deduct the pension rate due to that early retirement period

1.2.2. Basic content of compulsory social insurance and retirement law

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Compulsory social insurance plays an important role in the entire social security system.

of each country, it is a long-term regime to ensure income for employees when they no longer participate in labor relations. Compulsory social insurance as well as other social insurance regimes are regulated by law with basic contents on participants, contribution levels, conditions for benefits, benefits and benefit periods. Specifically as follows:

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Subjects participating in compulsory retirement social insurance

Compulsory social insurance is one of the 9 regimes that most countries in the world implement for employees. The social insurance law of Vietnam as well as other countries has also recognized compulsory social insurance as a compulsory insurance regime in the social insurance policy system. This is also one of the insurance regimes with a long implementation period, with a wide range of participants.

Depending on the specific conditions of each country in each specific period, each country has specific regulations with specific scope of application. Normally, the laws of each country stipulate a compulsory and voluntary social insurance system to cover all employees. However, in developed countries, some countries may stipulate that the only form of participation is mandatory for all employees.

According to the standard on the subjects participating in the pension system in a country, ILO Convention 102 stipulates that " the subjects participating in the pension system in a country must be at least 50% of the total number of wage earners or 20% of the economically active population " [31, Article 27].

Normally, subjects participating in compulsory social insurance include employees.

and employees. In most countries, employers' contributions to pension funds are higher than those of employees.

In some other countries, there is State participation in compulsory social insurance. The State can participate as an employer or as partial support in the contribution level or partial support in policies on apparatus management, preferential tax policies.

In Vietnam, the subjects participating in compulsory social insurance are regulated according to the Law on Social Insurance 2014. In addition to the subjects who are Vietnamese citizens, from January 1, 2018, new regulations will be added to expand the subjects participating. In particular, foreign employees working in Vietnam will also be entitled to participate in compulsory social insurance regimes applicable to employees with work permits or practice certificates or practice licenses issued by competent authorities of Vietnam.

Contribution level to compulsory retirement social insurance

Like all other insurance regimes, to form, there must be contributions from the participating parties. In practice, the collection rate for this regime is determined separately according to a certain ratio compared to the income or salary used to calculate social insurance. For compulsory social insurance for salaried employees, this income is usually salary. In some cases, the collection rate for compulsory social insurance is not determined separately but is combined into a collection rate called general social insurance collection.

In Vietnam, currently, the social insurance premium stipulates the percentage of compulsory social insurance contributions for employees and employers and is stipulated in the Social Insurance Law 2014.

Conditions for receiving compulsory social insurance retirement benefits

To enjoy a social insurance regime, the insured must ensure certain conditions and depending on the specific insurance regime, the conditions

The conditions for receiving benefits are different, but in general, countries are based on the level of contribution of the insured. For compulsory social insurance, the important conditions for employees to receive benefits are age and insurance payment period. Therefore, employees must reach a certain age and have a certain period of insurance payment before they can retire and receive a salary. Currently, the law in most countries does not stipulate that in order to receive old-age benefits, the labor relationship must be terminated because receiving old-age benefits is the right of employees when they have paid contributions for a certain period of time.

Regarding age, compulsory social insurance is an insurance regime for elderly people who no longer participate in labor relations, so only when they reach retirement age can employees enjoy this regime. In the world, depending on economic conditions

- The social and customs of each country have different regulations on retirement age for employees.

In addition, depending on the biological basis such as life expectancy, physical strength, and gender of the employee. In each country, depending on its own conditions, the conditions for enjoyment are different. Some countries stipulate the same retirement age for both men and women, while others are different, usually women have an earlier retirement age, some countries stipulate an early retirement age, and some countries stipulate a late retirement age.

According to ILO Convention No. 128, the retirement age is not more than 65 years old, but depending on the economic, political and social conditions of each country, a higher age may be prescribed [32, Article 15]. This is considered the ceiling for retirement age in the world, there are very few countries that prescribe a pension age higher than 65. However, in terms of society, ILO also provides some specific criteria to reduce the retirement age such as: gender discrimination, discrimination by type of work, age reduction in case of unemployment, age reduction in case of long-term work.

Currently, in general, the average life expectancy of people in the world is increasing due to the phenomenon of aging population, so some countries are tending to increase the retirement age of workers or implementing policies to encourage workers to continue working. In Japan, the average life expectancy is already quite high compared to other countries, but recently the birth rate has been decreasing and at the same time the aging population is developing rapidly, Japan is having to deal with the problem of serious labor shortage. The government of this country estimates that by 2065, the number of citizens over 65 years old will increase from 27% to 38% of the total population.

With the labor shortage becoming a difficult problem, raising the retirement age is a solution that many people are proposing in the hope of solving this problem. According to the country's new proposal, people from 65 to 74 years old will be considered "pre-elderly", people over 75 years old will be considered elderly, and people over 90 years old will be considered "long-lived". Japanese doctors also proposed that the Government change the retirement age regulations, accordingly, citizens over 75 years old will be considered elderly to encourage people from 65 to 74 years old to continue working and contributing [25].

Meanwhile, some other countries apply flexible retirement regulations with incentives to encourage employees to continue working and retire later, for example, increasing salaries for those who retire later, such as in the UK, US, and Canada [13, p.118].

Along with age, the period of social insurance payment is an important condition for enjoying compulsory social insurance. The period of social insurance payment is the total number of time units with insurance premium payment to enjoy this regime. The regulation of social insurance premium payment period aims to determine the labor contribution of each person to society in general and the contribution to social insurance in particular. The period of social insurance payment is one of the bases for paying allowances to employees to ensure fairness and equality among social insurance participants, implementing

One of the basic principles of social insurance.

According to the ILO, the recommended period for countries is 15 years or more for the monthly compulsory social insurance benefit regime, for cases with lower contribution levels, a lump sum benefit can be granted [32, Article 18]. In practice, most countries choose a higher contribution period than this.

Thus, in compulsory social insurance regimes, for compulsory social insurance, most countries stipulate that the conditions for enjoying the regime depend on two factors: the specified age and the number of years of social insurance contributions.

Compulsory social insurance pension benefit level and duration

The compulsory social insurance benefit is the amount that employees participating in social insurance receive after retirement and depends on the time they participate in social insurance. Normally, compulsory social insurance is paid periodically every month, but in some specific cases, for example, the period of social insurance participation is not enough or the minimum working time is also required, the benefit can be paid one or a certain number of times.

Compulsory periodic social insurance is applied to employees who have participated in social insurance according to regulations. The level of compulsory social insurance benefits is regulated at a certain rate compared to the employee's previous income. Cases with a short period of social insurance participation or actual working time will have their benefits reduced. The reduction level also depends on that seniority.

The period of receiving compulsory social insurance benefits is understood as the period from retirement until death. The period of receiving benefits is not defined in ILO documents. The period of receiving normal pension benefits is different for each person because retirement age and life expectancy are not the same.

According to the principle, the benefit level cannot be higher than the salary that the employee received during the working process. Because if this benefit level is higher or equal to the salary, everyone tends to retire to receive benefits.

Social insurance. But to ensure the principle of contribution and benefit and the purpose of compulsory social insurance is to stabilize the life of retirees, the benefit level must also ensure the minimum needs in their life.

Employees who meet the requirements and conditions for compulsory social insurance are entitled to receive pensions. Basically, compulsory social insurance includes monthly pensions and one-time pensions. Convention 128 also clearly states: “ Old-age benefits must be paid periodically, except in rare cases where national reserve funds make one-time payments, but most of them do not aim to ensure the needs of workers when they no longer work ” [32, Article 17].

Accordingly, monthly social insurance can be understood as a regime paid periodically (monthly, quarterly). The benefit level of compulsory social insurance is determined based on the contribution level, contribution period, and salary level while still working. In principle, the benefit level is never higher than the average salary used as the basis for calculating the benefit level. Regulations of all countries do not set a limit on the period of receiving retirement benefits, meaning that employees will receive retirement benefits when they die. One-time social insurance is a one-time payment regime for employees when they retire, usually in cases where they do not qualify for monthly compulsory social insurance benefits.

Sources of formation and management of social insurance and retirement funds

The Social Insurance Fund is an independent, centralized financial fund, formed from contributions from social insurance participants and other legal sources of revenue. The Social Insurance Fund is protected by the State and is a tool to implement the social insurance financial function and social insurance policy of the State.

As a component part of the Social Insurance Fund, the compulsory Social Insurance Fund has all the characteristics of an independent financial fund, formed from the contributions of the parties, and is used to make payments.

Compulsory social insurance.

The fund is formed from contributions from employers, employees, profits from fund investment activities, State support and other legal sources of income according to the rates prescribed by law.

Firstly , the fund is formed on the contributions of employers, employees and contributions or support from the state in some cases. This contribution is generally called social insurance premium and is the source that accounts for the largest proportion of the fund. The contributions of the parties depend on the social insurance policy, on the economic and social conditions of each country and on the countries' regulations on social insurance regimes.

Employees pay social insurance to insure themselves when they are no longer able to work based on a portion of their salary. On the other hand, it has the meaning of binding their obligations and rights tightly.

Every month, employers deduct from the salary fund of the agency or enterprise to contribute social insurance for the total number of employees they hire. The employer's contribution is prescribed by law, demonstrating their responsibility to employees.

For the State, in some social insurance systems, the State can contribute to social insurance directly or indirectly. In the case of direct participation by the State, it is also an employer of civil servants and public employees working in the state management sector and the public service sector and receiving salaries from the budget. In addition, as a manager of the economy and society, the State is responsible for ensuring the value of the social insurance fund and supporting the fund in necessary cases such as reconciling conflicts between the two parties through a system of legal policies. Not only that, the State also provides additional support to the social insurance fund to help stabilize social insurance activities.

Second , the fund is formed based on the increase in the fund's idle resources that are invested by specialized social insurance organizations to generate profits. Due to the nature of social risks and social events,

Funds are generated unevenly over time and space, so during operation, there is a part of the fund that is not used. The idle part is invested in the financial market or real estate market or other investment activities to generate profit.

Third , the revenue from fines paid by individuals and economic organizations for violating the law on social insurance is a source of revenue for the fund. According to the provisions of the law on social insurance in many countries, if the employer fails to pay social insurance premiums within a specified period, it will have to pay a fine equal to a certain percentage of the total amount payable, and still have to pay the prescribed social insurance premiums. Thus, fines are also a source of revenue for the fund.

Fourth , there are other revenues such as from individuals and charitable organizations.

Other legal revenues such as support and contributions from individuals and organizations at home and abroad, etc., but the most important is revenue from fund growth investment activities within the framework of the law.

In general, most countries follow the above mechanism to form a social insurance fund. However, each country stipulates different pension contribution rates.

Currently, after many years of amendments according to the provisions of the Social Insurance Law 2014, the Social Insurance Fund is divided into the following component funds: sickness and maternity fund, occupational accident and disease fund, pension and death fund [17, Article 83]. In which, the pension and death fund is used to pay benefits for both compulsory and voluntary participants. Previously, these two funds were separate.

According to Article 5 of the Law on Social Insurance 2014, the compulsory social insurance contribution rate is calculated based on the employee's monthly salary. From January 1, 2018 onwards, the monthly salary used to calculate the compulsory social insurance contribution rate of employees is the salary, salary allowances and other supplements as prescribed by law on social insurance.

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