Minister Dao Ngoc Dung: Gradually reduce the age of receiving pension benefits, approaching retirement age

(People's life) - "Regarding the gradual reduction of the social pension age, the Government has proposed to the National Assembly to reduce it from 80 to 75 years old, with the option of continuing to gradually reduce it, approaching the retirement age," said Minister Dao Ngoc Dung.

Minister Dao Ngoc Dung spoke to explain and clarify issues raised by National Assembly delegates.

On the morning of November 23, 2023, under the chairmanship of National Assembly Chairman Vuong Dinh Hue, the National Assembly discussed in the hall the draft Law on Social Insurance (amended).

After the discussion, Minister of Labor, Invalids and Social Affairs Dao Ngoc Dung spoke to explain and clarify the issues raised by National Assembly delegates.

On behalf of the Drafting Committee and the state management agency in the field of social insurance, the Minister thanked the National Assembly deputies for paying special attention to the draft Law on Social Insurance (amended).

75 years old receive pension benefits

Clarifying some basic issues, the Minister stated that, first of all, regarding social pension benefits, the Government and the Drafting Committee have closely followed the spirit of Resolution 28 to discuss, consider and submit to the National Assembly.

This is the first level in the multi-level social insurance system according to Resolution 28.

Social pension benefits are guaranteed by the State budget for workers of all ages who are elderly and do not have pensions or monthly social insurance. At the same time, there are policies to mobilize additional social resources for these subjects, helping to have higher pensions.

Regarding the gradual reduction of the social pension age, in the immediate future, the Government proposes to the National Assembly to reduce it from 80 to 75 years old, with the option of continuing to gradually reduce it, approaching the retirement age.

"This adjustment will depend on the socio-economic development situation and the State's budget capacity," said Minister Dung, adding that the timing and level of adjustment will be considered and decided by the National Assembly and the National Assembly Standing Committee.

At the same time, according to the Minister, in order to flexibly regulate the level of financial support for social pension benefits as well as other supports such as maternity, support for women and children... as stated in the draft, the Government will be assigned to regulate this level.

“All monetary regulations will be assigned to the Government to regulate, so it will be more appropriate and flexible. As for certain regulations, the Government’s responsibilities… will be reported to the National Assembly Standing Committee before consideration and decision according to authority,” said Mr. Dung.

National Assembly delegates listen to the discussion session

One-time social insurance: Difficult to come up with an optimal solution

Second, regarding the one-time withdrawal of social insurance, the Minister of Labor, Invalids and Social Affairs affirmed: "This is a big, important, sensitive issue, both political and social in nature but also highly professional in nature."

Therefore, the Drafting Committee and the Government will continue to carefully consider, research, and seek further opinions from beneficiaries and employers.

Mr. Dung said that to propose a one-time withdrawal of social insurance, it is necessary to aim for two basic goals, including: Meeting the legitimate needs of social insurance participants who still have the right to withdraw; striving to retain workers in the social security system and taking care of people with pensions when they retire.

Therefore, Minister Dao Ngoc Dung emphasized: "Currently, it is difficult for us to come up with an optimal solution or a solution with only advantages, but we will have to continue to propose or choose the solution with more advantages."

Through discussion and opinions of workers, labor organizations and especially the discussion opinions of the National Assembly today, Mr. Dung said that the adjustment of social insurance benefits will continue to be adjusted in the direction: Workers have the right to withdraw or not withdraw social insurance at one time, "but regardless of who paid before or after, after the law takes effect, in that spirit".

To clarify this content, Minister Dao Ngoc Dung said that recently, delegates raised many issues about different withdrawal levels. Some delegates said that only 8% of the employee's contribution can be withdrawn, while the remaining 22% is paid by the employer.

There is also a proposal to keep the 14% that the business pays, and allow the 12% that employees want to withdraw.

“We would like to report to the National Assembly that when the Drafting Committee proposed option 2, which is 50-50, here 50 is the payment period, not the payment level. It is necessary to clarify that the 50% remaining is left for the employee and is recorded in the social insurance book so that the employee can continue to enjoy social insurance benefits,” Mr. Dung stated that when the employee returns to participate, the payment period will continue to be added.

"If they do not participate, when they reach retirement age, workers will receive monthly benefits," the Minister emphasized.

Explaining why the 50-50 option had to be chosen, Mr. Dao Ngoc Dung pointed out three issues. First of all , this option still ensures the participants’ right to receive social insurance benefits at one time and is fair before and after the law takes effect.

Second , it is consistent with the recommendations of international organizations and overcomes current problems.

Third is to retain employees.

Overview of the discussion session at Dien Hong Hall

Technically, the Minister informed that the payment period will be consistent with the current social insurance management method as well as international practice of recording time and salary as the basis for payment, regardless of the contribution of the employee and the employer. “All countries are following that direction,” said Mr. Dung.

On the other hand, the Drafting Committee's plan states that the amount of funds withdrawn will be equivalent to the employee's social insurance contribution of 8%, not saying 8% but the withdrawal level is equivalent to 8%.

“That means 8% of the employee’s salary contribution in 1 year will be equivalent to 0.96% of the monthly salary,” the Minister further informed and stated at the same time, overcoming the limitations and difficulties in implementation if following the plan proposed by some National Assembly deputies. Because the contribution rate and the pension fund for the death of employees in the past were very different.

There was a time when it was 5%, a time when it was 6%, a time when it was 7% and now it is 8%. If we calculate 8%, it will not be possible for people who pay 5%, 6%, 7%. In addition, there are people who currently have to pay 22%, for example, wives and husbands in diplomatic corps or Vietnamese people working abroad pay 22%.

Then there are individuals who do not have to pay but the State pays 100%, such as non-commissioned officers, soldiers, armed forces students...

“Therefore, it can be seen that option 2 of 50% is what we have carefully calculated. It is the most optimal option among all the current options,” Minister Dao Ngoc Dung emphasized.

Social insurance contribution rate: Compatible with countries in the region

Regarding the opinion on the social insurance contribution rate, in addition to the opinion of the National Assembly delegate mentioned above, 13 associations have recently proposed to reduce the contribution rate back to the 2009 level. Mr. Dung informed that the social insurance contribution rate of each country is very different, often suitable to the context and conditions of economic and social development of each country.

“Our current contribution rate is 27.5% of monthly salary and is the basis for social insurance contributions. Basically, this rate is compatible with other countries in the region,” the Minister said, citing examples such as China’s current rate of 33%, Japan’s rate of nearly 30%, Malaysia’s rate of 26.7%, and Portugal, a very advanced country in social insurance, of 35%.

“Some countries may have lower rates than Vietnam, such as Malaysia at 26.7%, 0.8% lower than Vietnam. However, they stipulate that employers are responsible for taking care of employees when they encounter risks, accidents, or sickness or maternity benefits. Therefore, there are many shortcomings and so countries are moving in the direction of transferring back to the Social Insurance,” Minister Dao Ngoc Dung further cited and affirmed that therefore, the current social insurance contribution rate in Vietnam is relatively appropriate.

The project has very solid political foundations.

Also at the discussion session, the Commander of the Department of Labor, Invalids and Social Affairs informed that recently, the Drafting Committee has received many comments from the people, organizations and workers. And today, as in the previous group discussion, National Assembly delegates continued to pay attention and give many comments on the contents of the draft law.

"The drafting committee will seriously coordinate with the presiding agency and relevant agencies, maximally absorbing the opinions of delegates to report to the National Assembly in the upcoming session," said Mr. Dung.

According to Mr. Dung, the Social Insurance Law project has a very solid political foundation. That is Resolution 28 of the Central Committee on reforming insurance policies. This Resolution was drafted by the Chairman of the National Assembly at that time. Recently, Resolution 8 of the 13th Central Committee continued to discuss social policies.

“Therefore, the issues raised by the Drafting Committee and presented by the Government to the National Assembly contribute to institutionalizing the principle of striving towards multi-layered social insurance and universal social insurance, fundamentally overcoming current obstacles and difficulties. We will accept and try our best to complete the draft to submit to the National Assembly,” said Minister Dao Ngoc Dung.

Thanh Nhung

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