Do not increase retirement age to attract voluntary social insurance participants

Not yet attractive due to long closing time

According to the Ministry of Labor, Invalids and Social Affairs, in the period 2016 - 2021, our country has more than 54,000 people who voluntarily pay social insurance and are eligible to retire and receive pensions. Thus, each year, there are 9,000 more people receiving pensions from voluntary social insurance.

The Law on Social Insurance 2014 stipulates that the retirement regime of voluntary social insurance is linked with the compulsory insurance policy by stipulating the conditions for receiving pensions, the method of calculating pension rates, and the average monthly salary and income for which insurance has been paid. The period of payment of voluntary insurance and compulsory social insurance is cumulative.

According to the Ministry of Labor, Invalids and Social Affairs, this creates conditions for employees to flexibly and conveniently switch between two types of social insurance in accordance with each person's labor relations, needs and financial capacity.

However, recently, according to the assessment of relevant ministries, branches and agencies, the policy is not attractive enough because there are no short-term regimes like with compulsory social insurance.

In addition, many workers reflect that the regulation requiring 20 years or more of social insurance contributions to be eligible for pension is too long. That makes many workers not motivated enough to participate in voluntary social insurance.

To increase the attractiveness of voluntary social insurance, the draft revised Law on Social Insurance has added transitional provisions related to voluntary social insurance participants before the new law takes effect (expected from July 1, 2025).

Accordingly, employees who start participating in voluntary social insurance before the effective date of this law and have paid voluntary social insurance for 20 years or more will be entitled to receive pension when they reach 60 years old for men and 55 years old for women.

When retiring at this age, voluntary social insurance participants will not have their pension rate deducted as in the case of early retirement.

The Ministry of Labor, Invalids and Social Affairs explained that according to the current Law on Social Insurance, employees participating in voluntary social insurance are entitled to pensions when they have paid social insurance for at least 20 years and are of retirement age. Meanwhile, the 2019 Labor Code sets out a roadmap to gradually increase the retirement age, so that female employees can work until 60 years old (an increase of 5 years) and male employees can retire until 62 years old (an increase of 2 years). Accordingly, the waiting period to receive pensions is also gradually increased.

Therefore, to ensure compliance with the general direction of increasing the retirement age, the draft revised Law on Social Insurance has added transitional provisions for cases where employees who have participated in voluntary social insurance before the effective date of this law are entitled to the full retirement age conditions as above.

Increasing the attractiveness of voluntary social insurance

In order to increase the attractiveness and attract people to participate in voluntary social insurance, in addition to the proposed changes in pension conditions as above, the draft revised Law on Social Insurance proposes to supplement maternity benefits for this group.

Accordingly, employees participating in voluntary social insurance (including both female and male employees) when giving birth, if meeting the conditions of paying social insurance for 6 months or more within 12 months before giving birth, will receive a subsidy of 2 million VND for one child.

The maternity allowance regime of voluntary social insurance is guaranteed by the state budget, voluntary social insurance participants will not have to pay more than at present.

Examining this content in the draft law, the Standing Committee of the National Assembly's Social Affairs Committee assessed that the provision of maternity allowance for voluntary social insurance participants at VND2 million is not suitable to reality. Therefore, in order to attract workers to participate in the social insurance system early, this agency proposed that the Government consider raising this support to a more appropriate level.

In addition, to encourage workers in the informal sector and migrant workers to participate in voluntary social insurance, the Social Committee also recommends that the agency in charge of drafting the law continue to study international experience on subsidy regimes for children of workers participating in voluntary social insurance such as: discounted/free vaccinations, tuition support, and study costs for school-age children...

According to statistics from Vietnam Social Security, by the end of 2022, the whole country had more than 1.46 million people participating in voluntary social insurance, an increase of 1% compared to 2021.