Factors Affecting the Management of Compulsory Social Insurance Collection

1.2.5. Indicators for evaluating social insurance collection management

To have a basis for evaluating the management of social insurance collection, people often use quantitative indicators to reflect the implementation of the collection plan and the compliance with social insurance of compulsory participants. The higher the completion rate of the collection plan, the higher the compliance of compulsory social insurance participants, reflecting the better the management of social insurance collection by the social insurance agency and vice versa. The main quantitative indicators include:

- Indicators for assessing the completion of the social insurance collection plan: The completion of the social insurance collection plan is assessed through the indicator " Completion rate of social insurance collection plan ". This is the ratio between the actual social insurance collection amount and the planned social insurance collection amount assigned during the period.

Social insurance premium collection rate =

Amount of social insurance collected Planned social insurance collection amount

x 100% (1)

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The higher this index is, the better the social insurance collection management situation is and vice versa.

- Indicators for assessing compliance with mandatory social insurance contributions This indicator only applies to subjects participating in mandatory social insurance according to the provisions of the Social Insurance Law.

Rate of units participating in social insurance: Is the ratio between the number of units participating in social insurance and the number of units required to participate in social insurance during the period.

Rate of units participating in social insurance =

Number of units participating in social insurance Number of units required to participate in social insurance

x 100% (2)

This indicator shows what percentage of employers subject to mandatory social insurance contributions comply with social insurance payments during the year.

Rate of employees participating in social insurance: Is the ratio between the number of employees participating in social insurance and the number of employees required to participate in social insurance during the period. This indicator shows what percentage of employees subject to compulsory social insurance contributions comply with this regulation during the year.

Rate of employees participating in social insurance =

Number of employees participating in social insurance Number of employees required to participate in social insurance

x 100% (3)

The numerator and denominator of indicators (2) and (3) are calculated uniformly at the end of the year (December 31). These two indicators are higher year after year, demonstrating the compliance with social insurance contributions of participants and the increasingly better management of social insurance collection.

Social insurance debt unit ratio : Is the ratio between the number of units in debt to social insurance during the period and the number of units required to participate in social insurance during the period.

Social insurance debt unit ratio =

Number of units owing social insurance during the period Number of units required to participate in social insurance during the period

x 100% (4)

This indicator shows what percentage of units subject to compulsory social insurance contributions still owe social insurance during the period.

Social insurance debt ratio : The ratio between the total amount of social insurance debt in the period and the total amount of social insurance receivable in the period.

Social insurance debt unit ratio =

Total amount of social insurance debt during the period Total amount of social insurance receivable during the period

x 100% (5)

The calculation period in indicators (4, (5) can be month, quarter, year, and is calculated at the end of the period. The smaller these two indicators are, the more effective it is in social insurance collection management.

Social insurance collection rate: Is the ratio between the total amount of social insurance collected in the period and the total amount of social insurance receivable in the period.

Social insurance collection rate during the period =

Total social insurance revenue in the period Total amount of social insurance receivable during the period

x 100% (6)

The social insurance collection period can be monthly, quarterly or yearly. The numerator and denominator of the unified indicator are calculated by the cumulative method at the end of the period. This indicator shows the percentage of compulsory social insurance collection in the period. This indicator is larger each year than the previous year, demonstrating the compliance with social insurance contributions of participants and the increasingly good management of social insurance collection.

In general, the above indicators can be calculated for each block, each industry, each locality, economic region and the whole country.

1.2.6. Factors affecting the management of compulsory social insurance collection

In order to propose specific measures to better manage social insurance collection and prevent current social insurance revenue loss, we must analyze the factors affecting social insurance collection management.

1.2.6.1. Institutional system and policies on compulsory social insurance collection

In each different development period of the economy, with different economic institutions, the collection of compulsory social insurance is also different. Specifically, from 1980-1990, the collection of compulsory social insurance was implemented by the Ministry of Finance and included in the state budget revenue without an independent social insurance fund. During this period, the payment of pensions, loss of working capacity and death benefits was undertaken by the state budget and included in the annual budget expenditure plan. Since 1995, along with the development of a market economy regulated by the State, the collection of compulsory social insurance has been reformed to suit the socio-economic development of the country.

Therefore, legal documents on compulsory social insurance collection in each period must be consistent with the specific historical context of the country, and mainly consistent with the socio-economic development strategy.

If the State and the Social Insurance sector develop stricter, more complete, more synchronous, more comprehensive rules, regulations, and legal documents guiding the collection of compulsory social insurance, which are more suitable to the actual conditions and economic conditions of employees, the collection of compulsory social insurance will be more effective and thus contribute to ensuring a stable and constantly improving life. On the contrary, if the State and the Social Insurance sector do not develop and promulgate stricter, more synchronous rules, regulations, and legal documents on compulsory social insurance, the collection of compulsory social insurance will be less effective and will not achieve the set requirements and goals.

1.2.6.2. Local socio-economic development level

This is a factor that has a strong and direct influence on the collection of social insurance and the results of compulsory social insurance collection. In fact, places with large social insurance revenue are localities with a higher level of socio-economic development than other places. For example, Ho Chi Minh City and Hanoi are localities with high social insurance revenue.

The compulsory social insurance collection is very large. That is because, in these localities, the socio-economy is developed, where there are many large enterprises, where people have higher incomes, leading to higher understanding and awareness of employees' obligation to participate in compulsory social insurance.

On the other hand, if production and business activities are effective, employers will also be proactive and responsible for the enterprise's human resources, so they will be aware of paying correctly and fully their mandatory social insurance contributions for employees, overcoming the current common situation of deliberately avoiding participating in social insurance and long-term social insurance arrears.

Only when economic conditions are good, will workers have the conditions and awareness to participate in compulsory social insurance. That is why countries with developed economies have increasingly developed social insurance. On the contrary, in countries with poor, backward economies and low income, social insurance cannot develop.

1.2.6.3. Awareness level and sense of responsibility of compulsory social insurance participants

Enterprises need to determine that participating in social insurance is implementing a policy to ensure the stability of human resources. This stability helps enterprises boldly propose long-term production and business strategies, boldly sign contracts to increase revenue and increase profits for enterprises. Participating in social insurance is the responsibility of employers towards employees. Thoroughly understanding that idea will increase the competitiveness of enterprises, thereby the more enterprises participate in social insurance, the more total social insurance revenue increases, and the more sustainable the social insurance fund is.

Employers who pay social insurance according to the actual salary or income of employees will increase the social insurance fund and vice versa, the level of social insurance benefits will be high, ensuring stable costs when employees are sick, have maternity, have occupational accidents or diseases or are unemployed, especially the pension level ensures a stable life for them in old age.

Employees must have a deep understanding and awareness that participating in social insurance is a right, obligation, and mandatory responsibility to participate in social insurance.

1.2.6.4. Capacity to organize, manage, operate and implement compulsory social insurance collection

This is a factor that directly reflects the quality and effectiveness of management, operation and revenue exploitation of the Social Insurance agency; it is the process of applying and implementing compulsory social insurance policies and guidelines to organize implementation in each locality according to set goals.

But where the capacity to organize and manage the collection of social insurance is good, the collection efficiency will be high, with few cases of missing revenue sources, under-collection, and delayed debt in revenue sources. In addition, if the organization is fully established, operates synchronously, and each department performs its functions, powers, and responsibilities well, the collection of social insurance will achieve good results.

This key factor reflects the quality and capacity of the management, operations and compulsory social insurance collection staff. If this staff has capacity, solid expertise and good moral qualities, the capacity and organization of management and operations to collect compulsory social insurance will achieve high results and vice versa.

1.3. Experience in social insurance collection management in some countries in the world and lessons learned for social insurance collection management in Vietnam

1.3.1. Social insurance collection management in the Federal Republic of Germany

Some regulations on social insurance collection

The Federal Republic of Germany was the first country to establish compulsory social insurance. However, the development of social insurance was carried out step by step. Compulsory social insurance in Germany includes the following regimes: Sickness and maternity insurance; old age and disability insurance; occupational accident insurance; unemployment insurance (responsible for vocational training for the unemployed); and dependent insurance. Compulsory social insurance coexists with private social insurance to form the statutory social insurance regime. However, these regimes can be divided into two main types: contributory social insurance and non-contributory social insurance. Particularly for contributory regimes, the fund management method and collection regulations are also independent; here we mainly mention the contributory old age (retirement) and disability insurance regimes.

- Subjects: Employees and employers or apprentices are protected.

mandatory

- Premium payment: Retirement and disability insurance premiums paid by employers and employees are equal and are recalculated annually and changed from July 1st of each year according to the principle of revenue and expenditure (based on the amount payable to retirees and the number of social insurance participants, with a small additional amount to prevent fluctuations).

In recent years, the total contribution has been 19%. In addition, there is a federal subsidy that accounts for about 16% of the expenditure on old-age and disability insurance. In the recent pension reform, there is an additional supplement to the personal account, which is contributed only by employees with state assistance. From January 1, 2002, with state assistance, employees started to contribute 1% of their gross salary, increasing by 1% every 2 years until reaching 4% in 2008, when they are entitled to the highest level of state support for those participating in the private old-age insurance system to supplement the compulsory pension insurance.

Organization of social insurance collection

The decentralized and proactive organization of the funds is a characteristic of the system established at the end of the 19th century. The financial formation of the fund is mainly ensured by the contributions of the participating members. The contributions are shared in various forms according to the branches, between the insured and the employer, the Government provides additional support for some branches. In Germany, there are two social insurance management regimes for employees. All activities of collecting contributions, paying benefits as well as resolving complaints in the field of old age and disability insurance are carried out by one of these two agencies with the corresponding subjects:

First, the Federal Old Age Insurance Agency administers social insurance for employees and officials.

Second, the agency managing social insurance for workers, including 18 regional offices.

area

The Central Old Age Insurance Agency also plays a compensatory role as for the fund.

workers' pensions. All institutions administering the various old-age insurance schemes are administered by public law bodies operating on the principle of self-management.

1.3.2. Social Insurance Collection Management in Singapore

Overview

Social insurance benefits for employees in Singapore are provided through the Central Provident Fund (CPF). The CPF was established in 1995 as a compulsory social insurance scheme to provide financial security to employees when they retire or are no longer able to work. The CPF is a comprehensive social insurance scheme that not only takes care of the retirement, housing, and health care needs of the insured, but also provides for their family members.

Subjects participating in compulsory social insurance: Employees, wage earners (paid by the hour, day, week or month...); freelance workers.

Social insurance contribution rate: Employees pay 20% of their monthly income (salary), employers pay 10% of the total actual salary fund that must be paid to employees working for them. Employees are entitled to a gradual reduction in contribution rate from age 55 and those who are past working age are encouraged to continue working.

Social insurance fund, fund conservation and investment activities

To ensure the fund is always preserved and grown, CPF fund has applied the following forms of investment: Investing in the stock market, buying bonds, investing in credit institutions, purchasing high-value fixed assets, real estate market...

1.3.3. Lessons learned for social insurance collection management in Vietnam

When studying the social insurance of some of the above countries, it can be seen that the regulations on social insurance collection are also very rich and diverse. Depending on the characteristics of the situation and socio-economic conditions of each country, they have different regulations on social insurance.

- Social insurance is implemented on the principle that only those who participate in social insurance can enjoy social insurance benefits. The revenue of the social insurance system is mainly collected from contributions of employees and employers. In addition, there is support from the Government.

- Subjects: Compulsory social insurance is for those who have jobs and income in the form of salary or wages that exceeds the minimum level.

- Collection level: The contribution rate to the social insurance fund should be divided equally between employers and employees.

- Implementation method: Diversify types of social insurance so that employees can participate in both compulsory and voluntary social insurance; Decentralize to create autonomy for social insurance agencies in some localities with specific characteristics.

Developing social insurance collection services, Vietnam Social Insurance Agency can sign social insurance collection agency contracts with agencies such as tax authorities, banks, etc.

- Research on the use of personal codes for social insurance participants. When the use of personal codes is applied, it will help to manage and control social insurance participants more closely.

Above are some lessons learned on social insurance collection management that can help Vietnam more effectively collect social insurance in the future.

1.4. Development orientation of social insurance in Vietnam

In the market economy, everyone has equal rights in labor and enjoyment, has the opportunity to develop but can also face risks. Therefore, social insurance needs to implement "social protection" for all members of society. Vietnam's economy has been, is and will be oriented to develop many components. Non-state components have developed rapidly in recent years, made large contributions to the budget and participated in many aspects of social policies, including social insurance. If in the past, social insurance was only a single line, the main source of social insurance expenditure was from the State budget, today the need for social insurance has expanded to the whole society, which requires social insurance to have new development orientations to meet those needs.

It is expected that Vietnam Social Insurance will be developed in the following directions:

Firstly, perfecting the legal foundations and ensuring legal aspects such as: Perfecting the legal system on the organization and management of social insurance work, building operating regulations capable of meeting the requirements and tasks set out in the coming time of the Vietnam Social Insurance industry; Proposing specific policies for the operation of Vietnam Social Insurance on unified financial regulations, ensuring sufficient revenue, combating subsidies and preserving and growing the fund.