Based on the Labour Code passed at the fifth session of the 9th National Assembly, which came into effect on January 1, 1995, the Government, the Ministry of Labour, Invalids, and Social Affairs, along with various other ministries, issued numerous decrees, decisions, and circulars to guide the implementation of social insurance policies.

Among these, the key document governing social insurance policies and regulations was Decree No 12/CP, dated January 26, 1995, which outlined the mandatory social insurance for civil servants, public employees, and workers in enterprises.

At the same time, the Government issued Decree No 19/CP dated February 16, 1995, establishing Viet Nam Social Security, unifying the central and local social insurance organisations under the Ministry of Labour, Invalids and Social Affairs and the Viet Nam General Confederation of Labour.

 Ho Te - Chairman of the Viet Nam Social Security Board of Commissioners and leaders of the agency inaugurated the Viet Nam Social Security’s office at No. 7 Trang Thi, Hoan Kiem District, Ha Noi, on February 4, 1999.

The unified body was tasked with assisting the Government in managing the Social Insurance Fund and ensuring the consistent implementation of social insurance policies in accordance with the law.

On June 24, 1995, the Government’s Organisational and Personnel Committee, the Ministry of Labour, Invalids and Social Affairs, and the Viet Nam General Confederation of Labour issued Circular No 125-TT/LB, providing guidance on the transfer of personnel and responsibilities for social insurance from the ministry, and the general confederation to the Viet Nam Social Security.

The Viet Nam Social Security swiftly took over the duties, stabilised its internal organisation and began implementing the assigned tasks.

By the end of September 1995, 53 provinces and cities, 565 districts and towns had established social security offices, inheriting responsibilities, organisational structures and staff from the ministry and the general confederation and began operations across the entire system from October 1, 1995.

Difficult beginnings

From October 1, 1995, the entire system of Viet Nam Social Security, from central to local levels, comprising 4,864 officials and civil servants, began its operations amidst considerable challenges.

By the end of 1995, the social security offices in the 53 provinces and cities had largely completed the transfer of duties.

However, the resources they received were meagre.

Most social security offices at the provincial and district levels had to rent or borrow temporary premises, and the essential equipment for work only met a small fraction of the requirements.

During this period, following Decree No. 45/CP dated July 15, 1995, the Government issued the Statute on Social Insurance for officers, professional soldiers, non-commissioned officers, and enlisted personnel of the People’s Army and the People’s Police.

Social security units for the People’s Army (later the Ministry of National Defence’s Social Insurance) and the Social Insurance of the People’s Police were reorganized, with personnel and organizational structures placed under the Ministry of National Defence and the Ministry of Public Security. Their operations were guided by the Viet Nam Social Security.

Ceremony to announce the establishment of the Party Committee of Viet Nam Social Security on October 19, 1995.

Based on Decree No 12/CP and Decree No 19/CP, the Prime Minister issued Decision No 606/TTg on September 26, 1995, which established the organizational structure and operational regulations of the Viet Nam Social Security.

Under Article 6 of this decision, the Viet Nam Social Security Board of Commissioners is the highest management body of the Viet Nam Social Security. The organization was structured as a system spanning from central to local levels, with the Viet Nam Social Security at the national level, and Social Security Offices at the provincial and district levels.

Within the Viet Nam Social Security, there are eight departments to assist the Director General.

According to Decision No 606/QD-TTg, the Viet Nam Social Security operated under the direct guidance of the Prime Minister, was managed by the labour ministry, relevant agencies and was subject to oversight by the trade union organisation.

Results

According to the Viet Nam Social Security’s 1995 work summary report, in 1995, the Viet Nam Social Security allocated funds to provincial social security offices to ensure payment of social insurance benefits, totalling VND1.173 trillion (US$106 million). (In 1995, $1 was equal to VND11,003).

Of this, VND1.149 trillion (approximately $104.4 million) was for pension recipients transferred from the labour ministry, and VND24,3 billion ($2.2 million) was spent from the social insurance fund for pensioners in the fourth quarter of 1995, as well as sickness and maternity benefits.

Despite the slow process of transferring pensioners and social insurance recipients, provincial social security offices still ensured timely and accurate payments to all beneficiaries.

After stabilising the organisational structure, from October 1, 1995, the Viet Nam Social Security developed and gradually refined the mechanism for assessing social insurance claims, based on the principle of centralisation.

Only provincial social security offices had the authority to assess and approve claims according to the law, while the Viet Nam Social Security reviewed and re-assessed claims on a monthly basis.

The first officers of Viet Nam Social Security in 1995.

From July 1, 1996, the issuance of social insurance books was implemented nationwide.

By the end of 1996, after just six months, 2.5 million declarations were issued, over one million were processed, and more than 600,000 social insurance books were distributed.

During 1996, provincial social security offices also ensured timely, full and accurate payment of social insurance benefits.

After just two years of operation, with over 15 months of officially conducting professional activities, the organisational structure was gradually stabilised, despite the difficult working conditions faced by both the Viet Nam Social Security and provincial social security offices.

Most of their premises still had to be rented or borrowed.

However, the entire system of Viet Nam Social Security performed well across all areas of work.

In addition to achieving outstanding financial outcomes, ensuring secure benefit payments, and gradually implementing investment strategies to grow the Social Insurance Fund as directed by the Government, other tasks such as inspections, policy resolutions, and public awareness campaigns were also given attention.

At the April 1997 meeting to review 1996’s work and outline tasks for 1997, then Deputy Prime Minister Phan Van Khai stated, “In less than two years of operation, the Viet Nam Social Security has swiftly stabilized its organization, structure, and personnel; correctly implemented policies for participants and beneficiaries; achieved high results in social insurance collection, ensuring full and timely payments to beneficiaries; and has begun to account for and establish a self-contained Social Insurance Fund, independent of the State budget. This progress underscores the correct direction of the Government's reform policies, particularly the social insurance policy.”