Policy reforms needed to expand social insurance coverage
Opportunities from policy reforms
One of the key targets of Resolution No.28-NQ/TW, on reforming social insurance policies adopted at the seventh plenum of the 12th Central Committee of the Communist Party of Vietnam (CPV), is striving to ensure that 60 percent of the workforce participates in social insurance, including 5 percent of farmers and workers in the informal sector contributing to voluntary social insurance.
Nearly 70 percent of workers have yet to join social insurance
Social insurance policies have been gradually improved with the increasing number of participants and beneficiaries. Every year, around 4-5 million people enjoy short-term social insurance benefits, while close to 150,000 others enjoy long-term ones.
To date, nearly 3 million elderly people are entitled to pensions and social insurance benefits.
More than 50 percent of the elderly in Vietnam, including those with disabilities and those from difficult backgrounds, who contributed to the national cause of revolution enjoy monthy pensions and allowances.
Dr. Bui Sy Loi, Deputy Chairman of the National Assembly’s Committee for Social Affairs, said the current social insurance policies are not yet orientated towards the target of covering the entire population.
The incoherent connection between the social insurance system and other social welfare policies has led to the low coverage of social insurance, especially in rural and agricultural areas.
Loi cited that in 2017, only some 30 percent of the workfoce joined social insurance. More than 34 million workers (approximately 69.6 percent) have yet to participate in social insurance, he said.
Businesses have thousands of employees, but only a hanful of workers are elibigle to receive pensions.
Many shortcomings have existed in social insurance payment and benefit enjoyment, fields which require comprehensive reform, he stressed.
Every year, about 700,000 people leave the social insurance system, equivalent to the number of participants, he noted.
Proposing policy reforms
To expand the coverage of social insurance nationwide, Pham Truong Giang, Director General of the Social Insurance Department under the Ministry of Labour, Invalids, and Social Affairs, suggested increasing connectivity between taxation and social security agencies and implementing support policies to encourage people to partake in social insurance.
Regarding policy reforms, Giang said it is necessary to supplement short-term benefits for voluntary social insurance policies. In other words, the participation in social insurance should be one of the conditions to access the State’s preferential programmes, he recommended.
In particular, it is essential to simplify procedures for people to take part in social insurance and gain benefits from it, while removing administrative barriers, Giang said.
Bui Sy Loi said the foreseeable goal is to improve policies ensuring equal benefits for all social insurance participants.
In particular, it is necessary to build a multi-layered social insurance system, ensuring diversity and flexibility to encourage workers to participate, he suggested.
The first layer is voluntary, providing basic benefits supported by the state budget and gradually increasing public participation.
The second layer is compulsory with equal payments from both employers and employees.
The third is supplementary, depending on the financial capacity of businesses and individual workers.
Social insurance policies are to ensure that social welfare reduces risks during and after employment, Loi said, adding that it should be expanded to cover the whole of society to help workers enjoy life in old age.
60 percent of workers to join social insurance
Given the current shortcomings, Resolution No.28 of the seventh plenum of the 12th CPV Central Committee on reforming social insurance policies was signed for issuance by Party General Secretary Nguyen Phu Trong on May 23, 2018.
A number of measures were put forth to increase the attractiveness of the social insurance fund and expand coverage.
The resolution set the target of having around 35 percent of the workforce to participate in social insurance by 2021, 45 percent by 2025, and 60 percent by 2030.
To realise the target, the resolution proposed the amendment of conditions to enjoy pensions by gradually reducing the number of years paying minimum social insurane premium to enjoy pensions from 20 years to 15 years and 10 years.
Do Ngoc Tho, deputy head of the Vietnam social insurance policy implementation department, said the country aims to expand the coverage of social insurance for all people with modest benefits.
To do so, besides re-designing the social insurance payment and benefit enjoyment, Resolution No.28 has come up with some solutions to support businesses. When firms operate effectively, the number of workers joining social insurance will increase.
Besides studying to amend and improve social insurance policies and focusing on solutions to address consequences through the payment of unemployment benefits, training to meet the requirements of new jobs, and occupational introduction, it is necessary to take into account measures to prevent and mitigate unemployment via supporting businesses to maintain business operation activities and protect jobs for workers, according to the resolution.
The expansion of participants only makes sense when the lump sum payment is addressed. According to Resolution No.28, stricter regulations will be applied to handle this issue.
According to Director General of Vietnam Social Security Nguyen Thi Minh, the rate of people joining social insurance remains low. To realise the resolution’s target, the Vietnam Social Security will work to improve social insurance policies to extend the coverage with low payment and the State’s support.
In addition, information technology must be utilised in this work so that people can access and read social insurance policies from their smartphones. –VNA