Retirement insurance - 5

Our country is changing rapidly, the number of people receiving social insurance is increasing, requiring pension insurance policies to always be revised and adjusted to become more complete and suitable for new needs, meeting the increasing requirements for social insurance.

2. Period from 1995 to present

Decree 12/CP (January 26, 1995)

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After the implementation of Decree 43/CP, along with legal documents on social insurance and the birth of the Labor Code passed by the National Assembly of the Socialist Republic of Vietnam on June 15, 1994 and implemented from January 1, 1995, in addition, the Social Insurance Charter attached to Decree 12/CP issued on January 26, 1995 and Decree 45/CP issued on July 15, 1995 for social insurance beneficiaries who are workers in economic sectors and armed forces, truly recognized the innovations of Vietnam Social Insurance. From here, social insurance in Vietnam was officially implemented according to the market mechanism.

On the basis of inheriting the advantages of previous policies and the challenges posed in the new period. Decree 12/CP was issued with many amendments and supplements even in social insurance in general and pension insurance in particular. But the pension regime still plays a very important role. Decree 12/CP was issued with many differences compared to before. Specifically:

- Employees who are entitled to monthly pension benefits when leaving work must have

one of the following conditions:

+ Men must be 60 years old, women must be 55 years old and have paid social insurance for at least 20 years

go up.

+ Men aged 55 and women aged 50 and have paid social insurance for 20 years or more, and within those 20 years, have worked in one of the following cases:

 15 years of experience in a heavy, hazardous job or occupation.

 15 years of working in a place with a regional allowance coefficient of 0.7 or higher.

 10 years of working experience in the South, in Laos before April 30, 1975 or in Cambodia before August 31, 1989.

- Employees are entitled to monthly pension benefits with a salary lower than the salary specified above when one of the following conditions is met:

+ Men must be 60 years old, women must be 55 years old and have paid social insurance for at least 15 years but less than 20 years.

+ Men must be 50 years old, women must be 45 years old and have paid social insurance for at least 20 years

and up with a working capacity reduction of 61% or more.

+ Workers who have at least 15 years of experience in extremely hazardous and arduous work (according to the list of 10 regulated by the Ministry of Labor, War Invalids and Social Affairs and the Ministry of Health) and have paid social insurance for 20 years or more but have a reduced working capacity of 61% or more (regardless of age).

- Subjects participating in social insurance to receive retirement benefits include:

+ Workers working in state-owned enterprises.

+ Employees working in enterprises of non-state economic sectors that employ 10 or more workers.

+ Workers working in foreign invested enterprises

outside,

Export processing zones, industrial zones, in foreign agencies, organizations or international organizations in Vietnam, except in cases where international treaties to which our country is a signatory or participant have other provisions.

+ Employees working in service business organizations under the authority

administrative officials of Party and mass organizations.

+ Workers working in enterprises and service organizations

armed forces

+ People holding elected positions working in State management agencies, Party, and mass organizations from the central to district levels.

+ Civil servants and public employees working in administrative agencies

Industry, Party, and Union from Central to District level.

+ In addition, the above subjects who study, intern, work, or receive medical care domestically and abroad and still receive salary or wages are also subject to compulsory social insurance.

Through the above, we can see that the subjects participating in social insurance have been expanded, meeting the needs of workers, overcoming some limitations in previous documents and policies.

However, from the above regulations we see that there are still many points to consider :

- Regarding retirement age: this is one of the necessary conditions for workers when retiring. Workers must reach a certain age according to regulations to retire. According to the regulations, men must be 60 years old, women must be 55 years old, depending on each case, the retirement age can be reduced from 5 to 10 years. These regulations do not reflect the goal of the retirement regime which is old age insurance, meaning that workers must reach an age called old age. The general regulation on retirement age for men is 60 years old, women is 55 years old, there is no scientific basis to confirm that women's life expectancy is lower than men's while women's life expectancy is higher than men's.

+ Regulations on reducing retirement age for those who work in occupations or jobs

heavy, hazardous work or work in areas with harsh climates

The bad also needs to be clarified. In fact, these people are not old in terms of age but because their working capacity has decreased, so the basis for determining retirement conditions must be an assessment of reduced working capacity, not just a reduction in age.

Therefore, reducing the retirement age for those who are eligible is only a part of social benefits and is not the inherent content of social insurance. In fact, these people must stop working to receive social relief benefits until they reach retirement age to truly enjoy the meaning of the retirement regime.

+ For those who have lost 61% or more of their working capacity and have their retirement age reduced, this does not reflect the true purpose of the retirement system. The retirement insurance system only applies to the elderly who are no longer able to work. Therefore, if they have not reached the prescribed retirement age and have lost their working capacity or received disability benefits, we should not confuse these subjects, causing problems with the standards of the regime that they are entitled to. However, due to the fact that we have not yet established disability benefits and have abandoned the existing disability regime, there are cases where 61% or more of their working capacity has to be included in the retirement system.

- Regarding the time of participation in social insurance: This is a sufficient condition for employees to be entitled to pension benefits. The regulation on social insurance contributions (social insurance fees) is an important step forward in the social insurance system in our country, thanks to which the State budget does not suffer a deficit due to having to spend too much on social insurance. Moreover, the regulation on social insurance contributions demonstrates the relationships in social insurance, clearly showing the responsibilities of the parties when participating in social insurance.

According to current regulations, the minimum period of social insurance contribution must be 15 years or more. Such a period is both a sufficient condition for employees to receive pensions, to balance between social insurance contributions and benefits, and is also the basis for calculating salary levels for employees. However, the minimum period of 15 years of contribution also needs to be reconsidered because if the contribution is at least 15 years and the lowest benefit is equal to the minimum wage and the average benefit period is 18 years, it will affect the operation of the social insurance fund. If the majority of social insurance beneficiaries only have to pay social insurance for 15 years, the fund is likely to be overspent.

- Regarding pension benefits: According to current regulations, if a retiree has paid social insurance for more than 30 years, in addition to the monthly pension, he/she will receive a one-time subsidy upon retirement. The one-time subsidy is calculated from the 31st year onwards. For each additional year of social insurance payment, the pension is equal to 1/2 month of the average monthly salary used as the basis for social insurance payment, but not more than 5 months. In reality, most workers work in normal conditions.

Normally, if they work from the 18th year, they will have contributed for over 40 years for men and over 37 years for women when they retire. However, according to regulations, including the last 10 years of social insurance contributions, they will only receive a one-time benefit of a maximum of only 5 months of salary, and thus those who have worked from the 41st year onwards will not receive any benefits even though they still have to participate in social insurance contributions because they are not old enough to retire.

This is an unreasonable thing that does not demonstrate the principle of contribution and enjoyment.

in insurance

- Regarding the level of reduced working capacity: According to current regulations, some subjects with reduced working capacity of 61% or more are also considered for retirement benefits. This is unreasonable because many people, although their working capacity is reduced by 61% or more, can still work. Therefore, in the case of workers who lose their working capacity before retirement age, they should be given a disability allowance or disability benefits if they want to retire early or transferred to other jobs if they still want to work.

Previously, we implemented the labor disability regime to solve the problem for those who were not eligible for retirement, but during the implementation process, there were too many abuses, the number of people who actually enjoyed the labor disability regime only accounted for 1/3 of those who enjoyed this regime. Therefore, from 1993 onwards, the labor disability regime of 61% or more who were allowed to retire and receive pension benefits was not suitable for reality. Depending on the nature of the job, some people, although having labor disability of 61% or more, could still do other more suitable jobs. Such a general regulation for all cases would, on the one hand, cause waste of labor, on the other hand, it would increase social insurance expenditures due to having to pay pension benefits for a long time for those who retire at a young age.

Above are some specific regulations on retirement regime according to Decree 12/CP and Social Insurance regulations. In general, when applying this new regulation, there are clear advances, that is, monthly pension is higher than the implementation according to Decree 43/CP.

; pensions and benefits are not too high compared to those of working people. This does not encourage workers to retire early but still ensures a minimum standard of living for retirees and preserves the social insurance fund.

Although the Social Insurance Regulations are still incomplete because in terms of policy, such as the one-time pension insurance benefit regime is not approved in ILO Convention 102, it is still feasible for workers who retire early. If they wait until they are old enough, during the waiting period, they will not have income to cover their living needs and thus will have a negative impact on society.

Also in 1995, along with the issuance of Decree 12/CP (January 26, 1995) on the promulgation of the Social Insurance Charter, the Government also issued Decree 19/CP (February 16, 1995) on the establishment of the Vietnam Social Insurance Agency. This is a historical milestone marking the birth of Vietnam Social Insurance in the period of innovation in both mechanism and organization. Accordingly, Vietnam Social Insurance was established on the basis of unifying current social insurance organizations at the central and local levels under the Labor - Invalids and Social Affairs system and the Vietnam General Confederation of Labor to assist the Prime Minister in directing the management of the social insurance fund and implementing social insurance regimes and policies according to the laws of the State.

Decree 93/CP (November 12, 1998)

The innovation of social insurance policies according to Decree 12/CP has met the needs of the majority of the working class, while creating conditions for the development of social insurance and pension insurance. However, to keep up with the country's innovation, social insurance in general and pension insurance in particular need to continue to be revised and improved. Realizing this, on November 12, 1998, the government issued Decree 93/CP to amend and supplement a number of articles in the social insurance regulations issued together with Decree 12/CP dated November 26, 1995. Specifically:

- For employees who retire before the age prescribed in Article 25 - Social Insurance Regulations, amended and supplemented according to Clause 1, Article 1 of Decree 93/CP, it is stipulated as follows: For normal male employees who are 55 years old and have paid social insurance for 30 years or more and wish to retire, they will receive pension as calculated in Point a, Clause 1, Article 27 - Social Insurance Regulations, but for each year of retirement, the pension before the age is reduced by 1% of the average monthly salary used as the basis for paying social insurance, not by 2% as before.

Employees who receive monthly pension benefits with a lower pension level as prescribed in Clauses 2 and 3, Article 26 of the Social Insurance Regulations shall calculate their pensions as prescribed in Point a, Clause 1, Article 27 of the Social Insurance Regulations. However, for each year of early retirement compared to the age prescribed in Clauses 1 and 2, Article 25 of the Social Insurance Regulations, the average monthly salary used as the basis for social insurance contributions shall be reduced by 1%, not 2% as before.

- Particularly for those who have paid social insurance at salary levels for arduous, toxic or especially arduous, toxic jobs for 15 years or more and then switch to another job paying social insurance monthly, the salary scale prescribed by the State has a lower salary, then when retiring, the salary levels of the 5 consecutive years of doing arduous, toxic jobs will be used to calculate the average level as the basis for calculating pension.

- Employees who quit their jobs and meet all 3 conditions below will receive monthly pension benefits, the pension rate is calculated according to the provisions in Point 1, Clause 1, Article 27, Social Insurance Regulations, without calculating the reduction rate %.

+ Men from 50 to under 60 years old, women from 50 to under 55 years old, no

must pass labor capacity assessment.

+ Have paid social insurance for 30 years or more

+ Have a voluntary resignation to receive retirement benefits.

Since Decree 93/CP was issued, some existing problems have been overcome, such as:

- Reduce the retirement age for those doing heavy, toxic work... in accordance with the level of reduced working capacity.

- Allow early retirement when having paid social insurance for 30 years and having the desire to retire. This has helped some units reduce staff, creating conditions to consolidate and rearrange the organizational structure to be compact in order to increase labor productivity.

- Reduce the pension deduction rate of those who retire early to ensure

ensure that workers who have paid social insurance for 30 years are not disadvantaged.

However, there are still some problems : Decree 93/CP issued on November 12, 1998 took effect 15 days after the date of promulgation, so those who retired after November 28, 1998 will be subject to this Decree and will only have 1% of their average salary deducted if they retire before the prescribed age. Those who retired before November 28, 1998 will still have to pay the old rate (2% reduction), so in terms of social equity, this is not really fair; on the other hand, Decree 93/CP also stipulates that for those who retire before the age and have paid social insurance for 30 years, men must be from 50 to under 60 years old and women must be from 50 to under 55 years old and the employee himself/herself wishes to retire, they will be resolved as prescribed in Point a, Clause 1, Article 27 - Social Insurance Regulations.

For those who meet both conditions of age and number of years of social insurance contribution but want to return home at once, how will it be resolved? The Decree does not clearly state this, thus causing some difficulties for the policy implementation agency.

Decree 01/2003/ND-CP

Through the implementation of the above Decrees, we see that there are still many issues that have not really covered the actual situation (regarding the participants, contributors and beneficiaries...), so the Government had to issue Decree No. 01/CP dated January 9, 2003 to amend and supplement a number of articles of the Social Insurance Regulations issued together with Decree No. 12/CP dated January 26, 1995, supplementing a number of articles of the Labor Code as follows:

-About participants:

+ Employees working under a fixed-term labor contract of 3 months or more and an indefinite-term labor contract in the following enterprises, agencies and organizations:

 Enterprises established and operating under the Law on State Enterprises;

 Enterprises established and operating under the Law on Enterprises;

 Enterprises established and operating under the Law on Foreign Investment in Vietnam;

 Enterprises of political organizations, socio-political organizations;

 Individual production and business households and cooperatives;

 Administrative agencies, public service agencies, political organizations, socio-political organizations, socio-political-professional organizations, socio-professional organizations, other social organizations, and armed forces;

 Semi-public, private and civil establishments in the fields of culture, health, education

education, training, science, sports and other careers;

 Commune, ward and town health stations;

 Foreign agencies, organizations or international organizations in Vietnam, except in cases where international treaties to which the Socialist Republic of Vietnam is a signatory or participant provide otherwise;

 Other organizations that employ workers;

+ Cadres, civil servants and public employees according to the Law on Cadres and Civil Servants.

+ Employees and cooperative members work and receive wages under labor contracts of 3 months or more in cooperatives established and operating under the Law on Cooperatives.

+ Employees working at enterprises, agencies and organizations specified in Clause 1, Clause 3 and Clause 6 of this Article, working under a labor contract with a term of less than 3 months, when the labor contract expires and the employee continues to work or signs a new labor contract with that enterprise, organization or individual, must participate in compulsory social insurance.

+ Employees specified in Clauses 1, 2, 3, 4 and Clause 6 of this Article who study, intern, work, or receive medical treatment domestically or abroad and still receive salary or wages are also subject to compulsory social insurance.

+ Employees working and receiving salaries and wages under labor contracts of 3 months or more in agricultural, forestry, fishery and salt enterprises.

For employees working in agricultural, forestry and fishery enterprises

Salt industry has implemented land contracting with separate regulations.

- For beneficiaries:

+ Employees who have paid social insurance for 15 years will be calculated at 45% of the average monthly salary used as the basis for paying social insurance, then for each additional year of paying social insurance, an additional 3% will be calculated for female employees and 2% for male employees. The monthly pension level

Maximum monthly contribution is 75% of the average monthly salary used as the basis for contribution.

Social insurance (amendment and supplement to point a, clause 1, Article 27).

+ For employees who receive monthly pension benefits with a lower pension level as prescribed in Point a, Clause 1, Article 27, but for each year of early retirement compared to the age prescribed in Clauses 1 and 2, Article 25, the average monthly salary used as the basis for social insurance payment will be reduced by 1% (amended and supplemented Point b, Clause 1, Article 27).

Particularly for male employees aged 55 to under 60 years old, female employees aged 50 to under 55 years old and having paid social insurance for 30 years or more, who wish to retire, they will receive pension as calculated in Point a, Clause 1, Article 27, but for each year of retirement to receive pension before the retirement age, the average monthly salary used as the basis for paying social insurance will not be reduced by 1%.

+ In addition to monthly pension, female workers with over 25 years of social insurance payment, male workers with over 30 years of social insurance payment, upon retirement, will receive a one-time allowance calculated as follows: from the 26th year onwards for female workers, from the 31st year onwards for male workers, each year of social insurance payment will receive half (1/2) month of the average monthly salary used as the basis for social insurance payment, but not exceeding 5 months (amended and supplemented Clause 2, Article 27).

+ The following cases are entitled to a one-time social insurance benefit. Each year of social insurance payment is calculated as 1 month of the average monthly salary used as the basis for social insurance payment:

 Employees who have retired and reached retirement age or have lost 61% or more of their working capacity due to illness, accident, or occupational disease, but have not paid social insurance for enough time to receive monthly pension benefits as prescribed in Articles 25 and 26 of this Charter.

 People legally residing abroad.

 Employees who quit their jobs but are not yet old enough to retire but have paid social insurance for the required period as prescribed in Article 25, Clause 2 and Clause 3, Article 26 of this Charter can wait until they reach retirement age to receive monthly pension benefits or reserve their social insurance payment period to continue paying social insurance when conditions permit.

 Employees who quit their jobs but are not yet old enough to retire and have not yet reached the age limit for social insurance payment as prescribed in Articles 25 and 26 of this Charter shall be granted a social insurance book and have their social insurance payment period reserved so that they can continue to pay social insurance when conditions permit, including those whose names are