Current Status of Compulsory Social Insurance and Retirement Law

social market economy, so the welfare system and social security of this country are very good, an opportunity for Vietnam to refer to and learn. Our country should implement international integration policies towards compulsory social insurance coverage for all people according to a roadmap suitable to socio-economic development conditions, harmoniously combining the principles of contribution - benefit, fairness, equality, sharing and sustainability.

Currently, the Social Insurance Law has stipulated that from 2022, long-term social insurance regimes including retirement and death benefits will be paid for foreign employees. In addition to this regulation, it is necessary to implement other retirement benefits for employees more specifically and clearly to create fairness between domestic employees and foreign employees.

Fourth, increase retirement age according to roadmap

Germany has one of the lowest birth rates in Europe, and with this trend, the German population over 65 will almost double by 2035 [27]. With a rapidly aging population, life expectancy in Germany is currently 78 for men and 83 for women and continues to increase.

In fact, in our country today, the problem of population aging is also an urgent issue. Compared with countries with the same average life expectancy of the population, the retirement age in Vietnam is clearly lower than many other countries, so considering raising the retirement age like in Germany is a practical experience that we need to consider to apply appropriately in the current period according to the general trend in many countries in the region.

CONCLUSION OF CHAPTER 1

The International Labor Organization (ILO) adopted Convention No. 102 in 1952, which stipulates minimum standards on social security, recommending that member countries implement at least three regimes stipulated in the convention, including the compulsory social insurance regime.

Recognizing the urgency of the problem, Chapter 1 has clarified the concept of compulsory social insurance law, the unique characteristics of compulsory social insurance as a long-term regime outside the labor process associated with employees from the time of participating in social insurance until their retirement and death and the basic content of the law on compulsory social insurance such as participants, conditions for enjoyment, duration of enjoyment, contributions to form the compulsory social insurance fund. At the same time, on the theoretical basis, it has clarified the great role of compulsory social insurance in economic and social life, helping employees feel secure when working, employers limit and share the economic burden to stabilize production.

In the process of building and amending the compulsory social insurance policy, consulting and exchanging opinions on building the compulsory social insurance system of countries with a long history of development of social security policies in organizing the implementation of compulsory social insurance policies for employees plays an important role. Recognizing this importance, chapter 1 of the thesis has presented a number of typical compulsory social insurance models in some countries such as China, Japan, Germany, from which lessons can be drawn for Vietnam such as raising the retirement age, diversifying the participating resources like Japan, developing a modern social insurance policy system to create fairness between domestic and foreign employees... all of which contribute significantly to the task of ensuring social security, promoting progress and social justice for sustainable development of the country in the process of innovation, development and international integration. The research in chapter 1 is an important basis for studying the current status of laws and practical implementation of compulsory social insurance laws in chapter 2 of the thesis.

Chapter 2

STATUS OF LAW AND PRACTICE OF LAW IMPLEMENTATION ON COMPULSORY RETIREMENT SOCIAL INSURANCE IN VIETNAM

2.1. Current status of compulsory social insurance and retirement law

2.1.1. Regulations on the organization of the formation of compulsory social insurance and retirement funds

2.1.1.1. Subjects participating in the formation of compulsory retirement social insurance fund

force

Compulsory social insurance is one of the 9 regimes that most countries in the world

The world has implemented it for employees. The Social Insurance Law of Vietnam as well as other countries has also recognized the Social Insurance as a compulsory insurance regime in the Social Insurance system. This is also one of the insurance regimes with a long implementation period and a wide range of participants. Depending on each stage and socio-economic conditions of each country, the compulsory Social Insurance is built differently. In Vietnam, the compulsory Social Insurance is stipulated in the Social Insurance Law 2014, accordingly:

Subjects participating in compulsory social insurance include those working under indefinite-term labor contracts, fixed-term labor contracts, seasonal labor contracts or labor contracts for a specific job with a term of 3 months to less than 12 months, including labor contracts signed between employers and legal representatives of people under 15 years old according to the provisions of labor law.

From January 1, 2018, employees working under labor contracts with a term of 1 month to less than 3 months will also be subject to compulsory social insurance.

For cadres, civil servants, public employees; defense workers, police workers, people working in other key organizations; officers, professional soldiers of the people's army; professional officers, non-commissioned officers; technical officers, non-commissioned officers of the people's police; people working in

Cryptographic officers receiving salaries as military personnel; non-commissioned officers and soldiers of the People's Army; non-commissioned officers and soldiers of the People's Police serving for a limited period of time; military, police, and cryptographic students currently studying who are entitled to living expenses; people working abroad under labor contracts prescribed in the Law on Vietnamese Employees Working Abroad Under Contracts; business managers and cooperative managers who receive salaries; part-time workers in communes, wards, and towns; Foreign employees working in Vietnam with work permits or practice certificates or practice licenses issued by competent authorities of Vietnam are entitled to participate in compulsory social insurance according to Government regulations [17, Article 2, Clause 1].

Employers participating in compulsory social insurance include: State agencies, public service units, people's armed forces units; political organizations, socio-political organizations, socio-political-professional organizations, socio-professional organizations, other social organizations; foreign agencies, organizations, international organizations operating in Vietnam; enterprises, cooperatives, individual business households, cooperative groups, other organizations and individuals that hire and use labor under labor contracts [17, Article 2, Clause 3].

Compared to the 2006 Social Insurance Law, the 2014 Social Insurance Law has added 3 groups of subjects participating in compulsory social insurance, including: People working under labor contracts with a term of 01 to less than 03 months. This group of subjects, starting from January 1, 2018, will officially participate in social insurance. The second group of subjects is non-professional workers in communes, wards and towns, starting from January 1, 2016. The third group is foreign employees working in Vietnam with a work permit or practice certificate issued by a competent authority of Vietnam, will also participate in social insurance starting from January 1, 2018.

For compulsory social insurance regime for foreign employees from 2018 will be

There are many new points in Decree 143 guiding the implementation of the Law on Social Insurance for foreigners working in Vietnam. According to the Decree, in the immediate future, this group of subjects will participate in three social insurance regimes: sickness, maternity, occupational accident and disease insurance from January 1, 2018. In particular, the regulations on compulsory social insurance and death benefits will take effect from January 1, 2022. The purpose of postponing the implementation of long-term compulsory social insurance with two regimes: retirement and death benefits until 2022 is so that by that time, Vietnam will soon complete bilateral agreements on social insurance with other countries, avoiding double social insurance payments with other countries.

More specifically, the Decree guiding the implementation of a number of articles of the Law on Social Insurance on compulsory social insurance regime for foreign workers working in Vietnam has a number of notable provisions as follows:

Accordingly, foreign employees working in Vietnam are subject to compulsory social insurance when they have a work permit or practice certificate or practice license issued by a competent authority of Vietnam and have an indefinite-term labor contract or a fixed-term labor contract of at least 01 year with an employer in Vietnam.

Employees as prescribed above are not subject to compulsory social insurance as prescribed in this Decree when they fall into one of the following cases: " Moving within the enterprise " as prescribed in Clause 1, Article 3 of Decree No. 11/2016/ND-CP dated February 3, 2016 of the Government detailing the implementation of a number of articles of the Labor Code on foreign workers working in Vietnam, " Employees who have reached retirement age " as prescribed in Clause 1, Article 187 of the Labor Code.

Compared to the Social Insurance Law 2006, this is considered a new point in the Social Insurance Law 2014. This new regulation will create equality between domestic and foreign workers, because basically the regimes and powers are regulated similarly to Vietnamese workers working in Vietnam. Instead of paying in full

For foreign workers' salaries, the employer will deduct a portion of it to pay compulsory social insurance and will not change the total salary fund of the enterprise.

Thus , through the above analysis, it can be seen that the subjects participating in compulsory social insurance under the Social Insurance Law 2014 have both inherited and expanded and are more specific for the subjects participating in the compulsory social insurance fund, ensuring sustainable social security, especially old-age security, striving to achieve the goal set by the Party and the State for social insurance in Resolution No. 15-NQ/TW " by 2020, about 50% of the labor force will participate in social insurance " and aiming for universal social insurance coverage in the spirit of Resolution No. 28-NQ/TW.

2.1.1.2. Compulsory social insurance fund contribution level

The pension and death benefit fund includes contributions from compulsory social insurance participants including employers and employees, profits from fund investment activities, state support and other legal sources of income forming the compulsory social insurance fund.

Currently, employers and employees base their monthly salary and wages on contributions to the pension and death benefit fund to implement two long-term policies: pension and death benefit. The contribution levels of employees and employers to the pension and death benefit fund are shown in the following table:

Table 2.1. Contribution levels to the Pension and Death Fund

Unit: %

Year

2007 - 2009	2010 - 2011	2012 -2013	2014 onwards
employee	5	6	7	8
Employee	11	12	13	14
Total	16	18	20	22

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• Pre-tax Profit of Bidv Tien Giang in the Period 2011-2015 zt2i3t4l5ee zt2a3gsnon-credit services, joint stock commercial bank zt2a3ge zc2o3n4t5e6n7ts At that time, the Branch had to set aside a provision for credit risks, which reduced the Branch's income. Chart 2.2. Pre-tax profit of BIDV Tien Giang in the period 2011-2015 Unit: Billion VND 140 120 100 80 60 40 20 0 63.3 80.34 89.29 110.08 131.99 2011 2012 2013 2014 2015 Profit before tax (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) However, through chart 2.2, it can be seen that BIDV Tien Giang's profit is still increasing continuously, and its operating efficiency is currently leaking. This is a contribution of non-credit services, and this service segment will be increasingly focused on growth by BIDV Tien Giang to ensure the highest profit safety because credit activities have many potential risks. At the same time, focusing on developing non-credit services is consistent with one of the contents of restructuring the financial activities of credit institutions in the project "Restructuring the system of credit institutions in the period 2011-2015" approved by the Prime Minister in Decision No. 254/QD-TTg dated March 1, 2012 [14]: "Gradually shifting the business model of commercial banks towards reducing dependence on credit activities and increasing income from non-credit services". 2.2. Current status of non-credit service development at BIDV Tien Giang. 2.2.1. BIDV Tien Giang has deployed the development of non-credit services in recent times. Along with the development of the Head Office, BIDV Tien Giang's products and services are constantly improved and deployed in a diverse manner to ensure provision for many different customer groups in the area: individual customers, corporate customers, and financial institutions. Typical services are as follows: Payment services, treasury services, guarantee services, card services, trade finance, other services: Western Union, insurance commissions, consulting services, foreign exchange derivatives trading, e-banking services,... 2.2.1.1. Payment services: In accordance with the Prime Minister's Project to promote non-cash payments in Vietnam [15], banks in Tien Giang province have continuously developed payment services to reduce customers' cash usage habits through card services and electronic banking services such as: salary payment through accounts, focusing on developing card acceptance points, developing multi-purpose cards, paying social insurance by transfer, paying bills through banks, etc. Chart 2.3. Net income from payment services in the period 2011-2015 Unit: Million VND 6000 5000 4000 3000 2000 1000 0 3922 4065 4720 5084 5324 2011 2012 2013 2014 2015 Net income from payment services (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) Along with the technological development of the entire system, BIDV Tien Giang has a payment system with a fairly stable transaction processing speed, bringing many conveniences to customers. The results of observing chart 2.3 show that the income from payment services that the Branch has achieved has grown over the years but the speed is not high and the products are not outstanding compared to other banks. Domestic payment products such as: Online bill payment, electricity bills, water bills, insurance premiums, cable TV bills, telecommunications fees, airline tickets, etc. bring many conveniences to customers. Regarding international payment, this is an indispensable activity for foreign economic activities, BIDV Tien Giang is providing international payment methods for small enterprises producing agriculture, aquatic food and seafood that have credit relationships with banks in industrial parks in Tien Giang province such as: money transfer, collection, L/C payment. 2.2.1.2. Treasury services: BIDV Tien Giang always focuses on ensuring treasury safety and currency security, always complies with legal regulations, and minimizes risks in operations such as: counting and collecting money from customers, receiving and delivering internal transactions, collecting from the State Bank (SBV) or other credit institutions, receiving ATM funds, bundling money, etc. BIDV Tien Giang's treasury service management department is always fully equipped with modern machinery and equipment such as: money transport vehicles, fire prevention tools, money counters, money detectors, magnifying glasses, etc. to ensure absolute safety in treasury operations, immediately identifying real and fake money and other risks that may affect people and assets of the bank and customers. In addition, implementing regulation 2480/QC dated October 28, 2008 between the State Bank of Tien Giang province and the Provincial Police on coordination in the fight against counterfeit money, in the 3-year review of implementation, BIDV Tien Giang discovered, seized and submitted to the State Bank of Tien Giang province 475 banknotes of various denominations and was commended by the Provincial Police and the State Bank of Tien Giang province [17]. Chart 2.4. Net income from treasury services in the period 2011-2015 Unit: Million VND 350 300 250 200 150 100 50 0 105 122 309 289 279 2011 2012 2013 2014 2015 Net income from treasury services (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) However, as shown in Figure 2.4, income from treasury operations is not high and fluctuates. Specifically, in the period 2011-2013, net income increased and increased most sharply in 2013, then in the period 2013-2015, there was a downward trend. This fluctuation is due to the fact that fees collected from treasury services are often very low and can even be waived to attract customers to use other services. 2.2.1.3. Guarantee and trade finance services: BIDV Tien Giang, thanks to the advantages of the province and the favorable location of the Branch, has continuously focused on developing income from guarantee services and trade finance. Chart 2.5. Net income from guarantee and trade finance services in the period 2011-2015 Unit: Million VND 14000 12000 10000 8000 6000 4000 2000 0 5193 5695 2742 3420 8889 3992 11604 12206 5143 5312 2011 2012 2013 2014 2015 Net income from guarantee services Net income from Trade Finance (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) Through chart 2.5, we can see that BIDV Tien Giang's income from guarantee services and trade finance has grown over the years. The reason is: Among BIDV Tien Giang's corporate customers, the construction industry is the industry with the highest proportion of customers after the trading industry, this is a group of customers with potential to develop guarantee services. The second group of customers is corporate customers in the fields of agricultural production, livestock and seafood processing with high import and export turnover in the area. are the target of trade finance development. In addition, BIDV Tien Giang also focuses on continuously developing these customer groups to increase revenue for many other products and services in the future. 2.2.1.4. Card and POS services: As a service that BIDV Tien Giang has recently developed strongly, it can be said that this is a very potential market and has the ability to develop even more strongly in the future. Card services with outstanding advantages such as fast payment time, wide payment range, quite safe, effective and suitable for the integration trend and the Project to promote non-cash payments in Vietnam. Cards have become a modern and popular payment tool. BIDV Tien Giang early identified that developing card services is to expand the market to people in society, create capital mobilized from card-opened accounts, contribute to diversifying banking activities, enhance the image of the bank, bring the BIDV Tien Giang brand to people as quickly and easily as possible. BIDV Tien Giang is currently providing card types such as: credit cards (BIDV MasterCard Platinum, BIDV Visa Gold Precious, BIDV Visa Manchester United, BIDV Visa Classic), international debit cards (BIDV Ready Card, BIDV Manu Debit Card), domestic debit cards (BIDV Harmony Card, BIDV eTrans Card, BIDV Moving Card, BIDV-Lingo Co-branded Card, BIDV-Co.opmart Co-branded Card). These cards can be paid via POS/EDC or on the ATM system. In addition, with debit cards, customers can not only withdraw money via ATMs but also perform utilities such as mobile top-up, online payment, money transfer,... through electronic banking services. In order to attract customers with card services, BIDV Tien Giang has continuously increased the installation of ATMs. As of December 31, 2015, BIDV Tien Giang has 23 ATMs combined with 7 ATMs in the same system of BIDV My Tho, so the number of ATMs is quite large, especially in the center of My Tho City, but is not yet fully present in the districts. Basic services on ATMs such as withdrawing money, checking balances, printing short statements,... BIDV ATMs accept cards from banks in the system. Banknetvn and Smartlink, cards branded by international card organizations Union Pay (CUP), VISA, MasterCard and cards of banks in the Asian Payment Network. From here, cardholders can make bill payments for themselves or others at ATMs, by simply entering the subscriber number or customer code, booking code that service providers notify and make bill payments. Chart 2.6. Net income from card services in the period 2011-2015 Unit: Million VND 3500 3000 2500 2000 1500 1000 500 0 687 1023 1547 2267 3104 2011 2012 2013 2014 2015 Net income from card services (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) Through chart 2.6, it can be seen that BIDV Tien Giang's card service income is constantly growing because the Branch focuses on developing businesses operating in industrial parks, which are the source of customers for salary payment products, ATMs, BSMS. Specifically, there are companies such as Freeview, Quang Viet, Dai Thanh, which are businesses with a large number of card openings at the Branch, contributing to the increase in card service fees [25]. Table 2.6. Number of ATMs and POS machines in 2015 of some banks in Tien Giang area. Unit: Machine STT Bank name Number of ATMs Cumulative number of ATM cards POS machine 1 BIDV Tien Giang 23 97,095 22 2 BIDV My Tho 7 21,325 0 3 Agribank Tien Giang 29 115,743 77 4 Vietinbank Tien Giang 16 100,052 54 5 Dong A Tien Giang 26 97,536 11 6 Sacombank Tien Giang 24 88,513 27 7 Vietcombank Tien Giang 15 61,607 96 8 Vietinbank - Tay Tien Giang Branch 6 46,042 38 (Source: 2015 Banking Activity Data Report of the General and Internal Control Department of the Provincial State Bank [21]) Through table 2.6, the author finds that the number of ATMs of BIDV Tien Giang is not much, ranking fourth after Agribank Tien Giang, Dong A Tien Giang, Sacombank Tien Giang. The number of POS machines of BIDV Tien Giang is very small, only higher than Dong A Tien Giang and BIDV My Tho in the initial stages of merging the BIDV system. Besides, BIDV Tien Giang has a high number of cards increasing over the years (table 2.7) but the cumulative number of cards issued up to December 31, 2015 is still relatively low compared to Agribank, Vietcombank, Dong A (table 2.6). div.maincontent .content_head3 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: bold; text-decoration: none; font-size: 14pt; } div.maincontent .p { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; margin:0pt; } div.maincontent p { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; margin:0pt; } div.maincontent .s1 { color: black; font-family:"Courier New", monospace; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; } div.maincontent .s2 { color: black; font-family:"Times New Roman", serif; font-style: italic; font-weight: normal; 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• Current voluntary social insurance participation of workers in Doan Hung district, Phu Tho province - 15
• Sick leave regime in current Vietnam Social Insurance Law - 10

(Source: Articles 85, 86, 87 of the Social Insurance Law 2014)

According to the table above, employees will pay 8% and employers will pay 14% into the pension fund.

and death benefit. In which, the monthly salary used as the basis for contribution to the pension and death benefit fund for the administrative sector is the salary prescribed by the State according to the rank, level, military rank and position allowances, seniority allowances beyond the framework, seniority allowances (if any). This salary is calculated on the basic salary. Including the reserved difference coefficient according to the provisions of the law on salary.

For the business sector: The salary decided by the unit as the basis for paying the pension and death benefit fund according to regulations from January 1, 2018 includes salary, salary allowances and other additional amounts which are amounts other than salary and salary allowances related to the performance of work or position in the labor contract as recorded in Article 3 of Circular 23/2015/TT-BLDTBXH.

In which, the supplement must determine the specific amount of money along with the agreed salary in the Labor Contract and be paid regularly in each salary payment period according to Clause 2, Article 30 of Circular 59/2015/TT-BLDTBXH .

Other additional amounts as prescribed do not include bonuses as prescribed in Article 103 of the Labor Code, mid-shift meal allowances, support payments when employees have relatives who die, employees have relatives who get married, employees' birthdays, subsidies for employees facing difficult circumstances due to work accidents, occupational diseases and other support and allowances not related to job performance or position in the Labor Contract.

The law stipulates that salaries with the two above groups create a difference in the average monthly salary for social insurance contributions as the basis for calculating pensions and one-time social insurance benefits, leading to a distinction between employees receiving salaries and paying social insurance according to the salary regime prescribed by the State and those paying social insurance according to the salary regime decided by the employer.

In addition, from January 1, 2018, employees working under labor contracts with a term of 1 month to less than 3 months must participate in compulsory social insurance, including:

have compulsory social insurance

Also from the above time, foreign employees according to Clause 2 - Article 2 of the Social Insurance Law 2014 from December 1, 2018 to December 31, 2021, employees are not required to pay compulsory social insurance. From January 1, 2022, employees who are subject to compulsory social insurance are responsible for paying 8% of their monthly salary to the pension and death benefit fund.

For employers from January 1, 2022, every month, employers will contribute on the monthly salary fund of employees to social insurance: 3% to the sickness and maternity fund, 0.5% to the occupational accident and disease fund, 14% to the retirement and death fund [12, Article 13].

Thus, to ensure the correct roadmap for signing bilateral agreements on social insurance with other countries, the 2014 Social Insurance Law has more specific regulations on contribution levels for foreign workers in accordance with the current minimum wage.

2.1.2. Regulations on compulsory social insurance and retirement payments

2.1.2.1. Conditions for receiving compulsory retirement social insurance

According to Vietnamese law, depending on age and social insurance payment period, employees are entitled to monthly pension or one-time pension. In addition, they are also entitled to other benefits according to the law. Therefore, to enjoy each regime, employees must meet the following conditions:

First, the conditions for receiving monthly pension

Eligibility conditions are a set of legal provisions that serve as a legal basis for employees to enjoy mandatory social insurance. Accordingly, for mandatory social insurance, the important conditions for employees to enjoy insurance are age and insurance payment period.

In principle, compulsory social insurance is for the elderly who are no longer participating in labor relations, so only until they reach retirement age.