According to Vietnam Social Security (VSS), in the 2014-19 period, the sector paid lump-sum social insurance to nearly 3.7 million people. Each year on average more than 600,000 people applied for lump-sum withdrawal of social insurance. This figure equals the number of new social insurance members every year.

Comparing the proportion of new members and those who receive lump-sum payments during the 2014-19 period, we can see that with two new people joining the social insurance system, there is one person withdrawing.

Collecting lump-sum social insurance might result in a number of risks.

The majority of those who receive lump-sum payment are between 20 to 39 years old. Most of them are between 25 and 29.

People who pay social insurance for more than 10 years tend to get more lump-sum payments.

According to experts, the increasing number of people receiving lump-sum social insurance is posing a big challenge to achieving social security goals. Because collecting lump-sum social insurance means depriving themselves or losing the opportunity to enjoy pensions in old age, affecting the lives of labourers, their families and society.

This leads to a slow increase in the rate of national social insurance coverage.

Social security experts said shortcomings of current social insurance policies, which are not attractive enough to lure participants, lead to increasing number of lump-sum social insurance receivers.

Accordingly, the number of years of social insurance payment to enjoy a pension is too long, discouraging people to apply.

The conditions for lump-sum withdrawal of social insurance are quite easy. The lump-sum collection level is higher than the employee's payment.

The rate of entitlement to lump-sum social insurance is calculated based on the number of years of payment of the social insurance premium, each year is calculated by 1.5 months of the average monthly salary on which social insurance premiums are paid for the years of payment before 2014; two-month average monthly salary paid for social insurance for the years of payment from 2014 onwards.

In case the time of social insurance payment is less than one year, the level of social insurance allowance is equal to the amount paid, the maximum level is equal to two months of the average monthly salary paid for social insurance premium.

Illustrative Photo

At the second meeting of the 15^th National Assembly, a number of deputies agreed that the payment period of social insurance should be reduced from 20 years to 15 years or lower to attract more people to join and avoid lump-sum withdrawals.

Deputy Nguyen Ngoc Son from Hai Duong Province said the Government should study the amendments of regulations on receiving lump-sum social insurance following the spirit of Resolution 28-NQ/TW of the Central Committee on reforming social insurance policies, towards the goal of universal social insurance coverage.

He proposed amending conditions on the number of years of social insurance payment to enjoy a pension to make the policy more flexible and reduce the number of lump-sum collectors.

He also proposed adjusting the pension calculation method.

Illustrative Photo

Sharing the same opinion, deputy Nguyen Hai Anh from Dong Thap Province raised concerns over more and more people withdrawing from the system by receiving lump-sum social insurance.

Employees who leave the social insurance system are deprived of their right to participate in and enjoy social insurance regimes, especially long-term regimes such as retirement and survivorship, leading to risks in the future and posing great challenges to realising the goal of expanding social insurance coverage and ensuring the country's social security.

“It is necessary to review regulations on enjoying lump-sum social insurance thoroughly,” the deputy said, suggesting issuing a regulation to limit collection of lump-sum social insurance in order to ensure social insurance benefits are covered for all members.

Dao Ngoc Dung, Minister of Labour, Invalids and Social Affairs, said the Government held a meeting on amended social insurance law in late October to institutionalise Resolution 28 on reforming social insurance policies. A number of contents have been adjusted including the retirement age, lump-sum social insurance policy, and expanding the social insurance participant network in the non-official sector.

National Assembly Chairman Vuong Dinh Hue highlighted an urgent task which is to compile and submit to the National Assembly a draft amended law on social insurance and employment law to better manage lump-sum social insurance collection.

“Resolution 28 has raised the issue of shortening the time of payment of social insurance to enjoy a pension, in which the roadmap can be reduced to 15 years, or even 10 years. This makes it easier for employees to choose to pursue pensions at the end of their working age, limiting the status of lump-sum social insurance benefits,” he said./.