Former Deputy Head of the NA’s Committee for Social Affairs Dang Nhu Loi

Reporter: More and more labourers care about social insurance, of which the coverage has been increasing year after year. Could you provide a brief description of social insurance policies and benefits for participants?

- Dang Nhu Loi:

Social insurance is always a core policy in the social insurance system of any country and any society. The first social insurance system was created in Germany in the 19th century, which has been developing with numerous models and manners worldwide for hundreds of years.

In order to have diverse and rich social insurance models as today, theorists and managers have spent lots of time and efforts researching and drawing conclusions based on reality.

In Viet Nam, after the August Revolution, on the basis of the 1946 Constitution, the Government issued a series of decrees regulating sickness, accident and retirement benefits for State employees. The following legal foundation of social insurance was presented in the 1959 Constitution, reiterating that State employees were entitled to social insurance benefits.

In 1986, Viet Nam enacted its open-door policy, causing numerous changes in social policies in general and social insurance policies in particular. The 1992 Constitution stated that: “The State determines social insurance for public employees and other salary-earners, encourages other forms of social insurance for the workers”.

Later, Party congresses’ documents stated the necessity to renew Viet Nam’s social insurance policies based on the market mechanism, gradually increasing the number of participants as well as expanding implementation mechanisms (compulsory and voluntary). Recently, the 12th Party Central Committee’s Resolution No 28-NQ/TW dated May 23, 2018 set the target: “Reform social insurance policies to make social insurance a major pillar of the social security system, gradually expanding social insurance coverage, towards universal social insurance. Develop a social insurance system which is flexible, diverse, multi-layered, and modern with deeper international integration under the principle of contribution - benefit, fairness, equality, sharing and sustainability.”

Currently, labourers in Viet Nam are enjoying numerous benefits, including sick leave, maternity leave, allowances for work-related accidents and occupational diseases, pension allowance and death allowance. These benefits are increasing and guaranteed when the employee’s contribution amount to the State Social Insurance Fund is largely paid by the employer and the contribution and benefit levels are adjusted to increase in accordance with the annual Consumer Price Index (CPI) as prescribed by the Government published in the year in which the participant joins the scheme. Thus, pension allowance from the social insurance system is always a basic and significant source of income for every elderly person in every country. Even in developed countries, despite the existence of big names in commercial and life insurance areas, social insurance policies are still given much importance.

Reporter: One of the matters of concern among labourers is how the social insurance fund is operated, managed and guaranteed. Could you tell us more about this?

- Dang Nhu Loi:

With the information I mentioned above, I want to reiterate that social insurance policies are a policy of humanism by the Party and State to ensure that every citizen has the right to social welfare. The Social Insurance Fund is protected by the State, which means it cannot be broken. The Law on Social Insurance stipulates that the State shall protect the social insurance fund and take measures to preserve and develop the fund. Therefore, the fund’s safety is always under control.

Benefits of social insurance participants are guaranteed in any case. Illustrative Photo

Regarding the management of the social insurance fund, legal regulations specify that annually, the Government shall report to the National Assembly on the implementation of policies and laws on social insurance; and the management and use of the social insurance fund. Once every three years, the State Audit Office share audit the social insurance fund and report on audit results to the National Assembly. Additionally, at the request of the National Assembly, the National Assembly Standing Committee and the Government, the social insurance fund shall be audited unexpectedly. Furthermore, Viet Nam Social Security also makes periodic reports on the management and use of the social insurance fund to the Ministry of Labour, Invalids and Social Affairs, the Management Board of Vietnam Social Insurance, etc. These practices indicate that the social insurance fund is always managed strictly and transparently.

In the operation of the social insurance fund, the payment for participants is guaranteed with the payment amount increasing annually. At present, an average of three million people receive monthly pension allowance and social insurance benefits with the amount of thousands of billions of dong. 

Reporter: As an expert with your own experience in participating in and benefiting from social insurance policies, do you have any advice for the general population and labourers?

- Dang Nhu Loi:

With benefits, guarantees and safety of social insurance policies, I expect that labourers and the people should trust and join the scheme. At present, certain labourers are not well aware of or have not paid due attention to their own benefits participating in the social insurance system. Some even wish their employers not join the social insurance system so they can receive extra money of some thousands of hundreds of dong, but they do not know that the amount they lose currently and in the future is much larger.

Illustrative photo (internet)

Social insurance brings about benefits to which no type of savings can compare. To put it simply, the current social security contribution amount is equal to 25.5 per cent of the employee’s monthly income, in which the employee contributes 8 per cent and the employer contributes 17.5 per cent.

For instance, if the employee earns a total of VND5 million per month, the social insurance fund collects VND1,275,000, in which the employee pays VND400,000 (31 per cent of the total contribution) and the employer pays VND875,000 (69 per cent). Many think that if they do not join the social security system, they will be paid the above-mentioned amount of VND875,000, but in reality, they will not receive that amount of money. 

Therefore, participation in the social insurance system enables the employee to enjoy all benefits (100 per cent), including: sick leave, maternity leave, allowances for work-related accidents and occupational diseases, pension allowance and death allowance, compared to what s/he contributes monthly (8 per cent of monthly income or 31 per cent of the total contribution to the social insurance fund). Thus, when doing any job, labourers should ask their employers to participate in the social insurance system because it is a basic right of labourers that any enterprise has to comply with when signing a labour contract from one month.

Besides, as a social insurance participant and beneficiary for the past years, I realise that the implementation of social insurance policies by the State, especially by Viet Nam Social Security, has gradually been improved and modernised.

Currently, I receive my monthly pension allowance through my bank account, which is quite convenient, quick and accurate. Other services can also be conducted online or via smart phones to help participants and beneficiaries.

Reporter: Thank you for your time!