Reduce the minimum number of years of social insurance payment, increase the opportunity to receive pension

As a very important law, with a very large and long-term impact on the subjects, the Social Insurance Law has the backbone, core and guarantees that social insurance is a main pillar of the social security system in a socialist-oriented market economy.

At the 6th Session (phase 2), the National Assembly will give opinions on the draft Law on Social Insurance (amended).

One of the notable contents in the bill is the reduction of the minimum contribution period to receive pension from 20 years to 15 years, aiming to increase the number of people receiving pension (Article 64).

Better guarantee of workers' retirement life

Currently in the Social Committee of the National Assembly there are two different opinions on this issue.

The first type of opinion agrees with the Government's proposal to reduce the minimum number of years of social insurance contributions to receive a pension from 20 years to 15 years.

The second type of opinion suggests keeping the current 20-year regulation to ensure that the pension received is not too low and also creates an attractive pension regime in terms of benefits, ensuring a certain social security floor.

This opinion holds that reducing the regulation to 15 years will easily create conditions for participants to "withdraw insurance at one time" many times, especially in the context of the current increasing trend in the number of people receiving one-time social insurance benefits.

Reducing the minimum number of years of social insurance contributions to only 15 years, in fact the benefit level of 15 years for men is only 33.75%, while for women it is still 15 years and the benefit level is 45%. Is this suitable and ensures fairness and sharing in the social insurance system?

In addition, when the Labor Code 2019 was passed, the retirement age was increased according to the roadmap (to reach 62 years old for men in 2028 and 60 years old for women in 2035). At that time, the Government explained and said that it was to achieve the goal of compensating for the decline in the labor force due to the rapidly aging population trend in Vietnam, while at the same time, contributing to increasing the time of participation in social insurance, helping to ensure the balance of the Social Insurance Fund in the long term.

In addition, Article 23 of the draft Law has added a regime for employees who are not eligible for pension but are not old enough to receive social retirement benefits.

According to Chairwoman of the National Assembly's Social Committee Nguyen Thuy Anh, the Standing Committee of this Committee agrees with the first type of opinion, stating that ensuring the minimum number of years of participation in social insurance is only a necessary but not sufficient condition to enjoy the full minimum pension regime, but also ensuring the retirement age condition.

The regulation of reducing the number of years of social insurance contributions to enjoy retirement benefits will be more attractive to workers, the coverage rate of social insurance beneficiaries will increase in the medium and long term, creating conditions for older workers with low social insurance participation years to access and enjoy social insurance benefits, improving fairness.

This adjustment to reduce the minimum number of years of social insurance contributions to be eligible for pension is implemented in accordance with the spirit of Resolution No. 28-NQ/TW on reforming social insurance policies.

Reduce the number of years of social insurance contributions for men from 20 years to 15 years and the minimum wage (floor) for this group is only 33.75% of the social insurance contribution salary, if social insurance contributions are made for 20 years, it will be 45% as at present; for women, it is 15 years and the benefit level is 45% as at present. This is consistent with the Government's proposal and the draft Law when the scope of this amendment is limited to keeping the pension calculation formula unchanged.

In addition, adjusting the reduction of social insurance participation time to receive pension benefits at the minimum level is necessary to encourage workers with discontinuous social insurance participation to reserve time, waiting to receive pension when reaching the prescribed age, creating opportunities to keep workers in the social insurance system.

Even though the pension corresponding to the minimum period of social insurance contribution will be more modest than those with a long and full period of contribution, with a stable monthly pension, periodically adjusted by the State according to the consumer price index and during the pension period, the Social Insurance Fund will also pay health insurance, and when they die, there will be a death benefit, which will contribute to better ensuring the life of workers in their old age and many elderly people will benefit from this policy.

"This policy aims to create conditions and attract the elderly group of workers (from 45 to 55 years old), even for some groups of people who have received a one-time social insurance benefit, to participate or re-participate in social insurance to receive pension. Reducing the condition on the minimum time of social insurance payment to receive pension will contribute to promoting the multi-layered and flexible connectivity of the system," said Ms. Nguyen Thuy Anh.

In order to have a solid basis for the National Assembly to consider and decide, the Social Committee requests the Government to thoroughly and convincingly explain this change in terms of the principles of contribution-benefit and sharing of social insurance, the economic aspect of the issue, or how to change the viewpoint on the minimum social security floor when amending the law. It is necessary to clearly express the viewpoint on the pension of some groups of workers (part-time, commune, village) who will receive a pension lower than the poverty line, then will it be adjusted to be higher, and forecast the budget source to pay?

Will this regulation create conditions for workers to "withdraw insurance at one time" many times? In particular, the Government needs to do a good job of propaganda, organize more widespread consultation and explain fully and thoroughly so that workers and public opinion can understand and agree.

Limit one-time social insurance withdrawal

Responding to concerns raised by the Social Committee, Minister of Labor, War Invalids and Social Affairs Dao Ngoc Dung said that according to the provisions of the Social Insurance Law and international practice, to be eligible for pension, employees must simultaneously meet two conditions: reaching retirement age and having paid the minimum social insurance premium. The condition regarding the minimum social insurance premium premium according to the current Social Insurance Law is 20 years.

During the implementation of the Social Insurance Law in 2014, over 476,000 people who received one-time social insurance benefits had participated in social insurance for over 10 years and were aged 40 or older; over 53,000 people who reached retirement age and had not yet paid social insurance for 20 years chose to receive one-time social insurance benefits; over 20,000 people who reached retirement age and had not yet paid enough had to pay one-time benefits for the remaining time to receive salary.

"Thus, the current regulation that the minimum social insurance payment period to receive a pension must be 20 years has caused difficulties and reduced the opportunity to receive a pension for some people who do not pay social insurance for 20 years," Minister Dao Ngoc Dung stated.

In order to increase the number of people receiving monthly pensions, Article 71 of the draft Law has been amended to stipulate that employees who reach retirement age and have paid social insurance for 15 years or more are entitled to receive monthly pensions. This provision is intended to create opportunities for some groups of people who start participating in social insurance late (starting at 45-47 years old), or participate intermittently, or do specific jobs with short working hours, leading to not having accumulated 20 years of social insurance contributions when reaching retirement age.

"The regulation to reduce the minimum social insurance payment period to receive pension from 20 years to 15 years aims to create conditions for workers with short social insurance payment periods as mentioned above to also have the opportunity to receive monthly pensions and be guaranteed health insurance when they reach retirement age; this regulation also contributes to reducing the number of people receiving one-time social insurance payments due to being eligible for pensions," said Minister Dao Ngoc Dung.

According to National Assembly Chairman Vuong Dinh Hue, one of the reasons for withdrawing social insurance at one time is because the payment period to receive social insurance is too long (20 years).

"In difficult times, during the pandemic, between the next 20 years and the immediate future, sometimes workers choose the immediate future because the time is too long. Therefore, Resolution 28-NQ/TW clearly states to amend the conditions for enjoying the pension regime in the direction of gradually reducing the minimum number of years of social insurance contributions to enjoy the pension regime from 20 years to 15 years, towards 10 years," said the National Assembly Chairman.