Proposal to reduce social insurance payment period to 10 years

The Chairman of the Hosiden Company Union proposed reducing the number of years of social insurance contributions from 20 to 10 years so that workers can receive their pensions early.

At the meeting between workers and National Assembly delegates on May 12, Mr. Nguyen Van Tan, Chairman of the Hosiden Company Union (Quang Chau Industrial Park, Bac Giang), proposed that the amended Law on Social Insurance should divide the social insurance payment period into several levels of 10 - 15 - 20 years as a condition for workers to receive pensions. The pension rate corresponds to the number of years of payment, the longer the participation, the higher the benefit level.

For example, Mr. Tan said that if he paid for 10 years, the benefit would be 30% of the average salary for social insurance; if he paid for 15 years, he would receive 45% and it would increase gradually according to current regulations. The condition is that the maximum retirement age is 62 for men and 60 for women. Current regulations are that workers who pay for 20 years of social insurance and reach retirement age will receive 45%, plus 2% for each year of payment until reaching the maximum level of 75%. The revised Social Insurance Law is proposing to reduce the number of years of payment from 20 to 15 years.

Mr. Nguyen Van Tan, Chairman of the Hosiden Company's Trade Union, pointed out that many workers who have paid social insurance for 10 years choose to withdraw their social insurance at once because the number of years required to receive a pension is far away. Photo: Gia Chinh — Mr. Nguyen Van Tan, Chairman of the Hosiden Company's Trade Union, pointed out that many workers who have paid social insurance for 10 years choose to withdraw their social insurance at once because the number of years required to receive a pension is "far away". Photo: *Gia Chinh*

Explaining the proposal to reduce the social insurance payment period to 10 years, Mr. Tan analyzed that there is a tendency for workers who have paid for 10 years to choose to withdraw their social insurance at one time. This group is usually female, aged 40-45. Statistics from the Ministry of Labor, War Invalids and Social Affairs also show that the group withdrawing social insurance at one time in the period of 2016-2021 is mostly 30-40 years old, accounting for 40.4%; people aged 40-50 account for 15.4%.

People over 40 find it difficult to find new jobs, so they have to work freelance. Businesses do not want to hire workers, making it impossible for them to continue paying social insurance, while the voluntary social insurance scheme is not attractive. Workers are stuck, wavering between not having enough years of social insurance contributions to receive a pension or continuing to pay.

"With the thought that they will not receive a pension anyway, 40-45 year old workers will choose to withdraw their social insurance at one time," Mr. Tan explained. He asked workers who have paid social insurance for 10 years to withdraw at one time, they said the amount they would receive was about 150 million VND, a large amount to spend on their children's education and home renovations.

Another reason, according to Mr. Tan, is that reducing the social insurance payment period to 10 years will motivate many people to stay in the social security system. At the age of 40-45, after retiring, workers do not have to wait too long to receive retirement benefits like the 30-year-old group. "Paying for a few years will result in a low level of benefits, but it is better than nothing. For the elderly, pensions are really important and this amount is still adjusted every year, plus the subsidy when reaching the age, so they do not have to rely on their children," he said.

In addition to reducing the number of years of social insurance contributions, many grassroots trade union officials have recommended that National Assembly deputies and Bac Giang authorities take immediate measures to resolve the situation of social insurance debts and late payments. Mr. Ha Minh Vi, Vice Chairman of the Trade Union of Industrial Parks in Bac Giang Province, pointed out that there are enterprises that owe social insurance for up to 3 years, or units with only 150 employees but owe up to 10 billion VND, and their owners have absconded.

Responding to this request, Mr. Le Anh Duong, Chairman of the People's Committee of Bac Giang province, said that for enterprises with arrears and late payment of social insurance, the province has assigned the sectors to have an early warning mechanism. Specifically, for enterprises with arrears of more than three months, the Social Insurance of Bac Giang province will inform the labor sector and trade unions to take action. The list will then be made public on the provincial Social Insurance portal or administrative fines will be imposed depending on the level of delay of the enterprise. The above measure has helped Bac Giang recover 7 out of 20 billion VND of outstanding social insurance debt.

"Information on unpaid debts and late payments needs to be made public so that relevant sectors know, to avoid a situation where only the Social Security and the business know about the debt and then no one knows where the money goes," said Mr. Duong, promising to take stronger measures to limit social insurance debts and promptly prevent owners from absconding, especially foreigners.

Hong Chieu - Family Finance

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