The Government has sent a report to the National Assembly about the management and use of the Social Insurance Fund in 2008-2009, which said that this fund may break down.

VietNamNet Bridge – The Government has sent a report to the National Assembly about the management and use of the Social Insurance Fund in 2008-2009. According to the report, this fund may break down in the future, affecting millions of people.

Taxman asked to collect social insurance fees

Social insurance beneficiaries to double

Agency will sue over failures to pay social insurance for workers

Tien Phong newspaper interviewed Tran Thi Thuy Nga, chief of the Ministry of Labour, War Invalids and Social Affairs’ Social Insurance Agency about this issue.

Tien Phong: How specific is the risk for the Social Insurance Fund?

Tran Thi Thuy Nga: Spending for retired people and the death gratuity accounted for 73.29 percent of the total premiums collected from employers and employees in 2008 and 88.5 percent in 2009.

According to experts from the World Bank (WB), the total premium paid by employees and employers plus the interest collected from this amount is only enough to pay retirement pensions for 10 years to each beneficiary. Meanwhile, the average period for receiving retirement pensions in Vietnam is 19.5 years. We can see that the funds for pensions and the death gratuity can’t continue coverage in the long run.

Tien Phong: To maintain the solvency of the Social Insurance Fund, what measures are needed?

Thuy Nga: In Vietnam, we can implement some solutions, such as extending the time of paying social insurance premium, raising the retirement age for women, fix premiums based on real income, re-defining retirement pensions for women and men, making a formula to calculate the average person’s salary as the basis of retirement pensions for all workers and adjusting retirement pension in accordance with the Law on Social Insurance.

Tien Phong: But the Vietnam Social Insurance Fund deposits thousands of billions of dong in banks that yield low profit. Why not invest the money in lucrative projects?

Thuy Nga: I think we can allow the fund to invest in business projects to raise profits from idle capital while cutting down costs.

Tien Phong: However about premium debts of employers?

Thuy Nga: The highest penalty for violators of the rules on regulations is 30 million dong. Some have proposed levying fines based on the premium debts. Some businesses that don’t pay premiums have been sued.

It is necessary to raise penalties to deter employers from disobeying social insurance laws. Those who are fined, but continue breaking the law, must be punished under the Penal Code.

Source: Tien Phong