Regretful for not having a pension in old age

At over 60 years old, Pham Thi Ng. (Quang Vinh ward, Biên Hòa City, Đồng Nai) has been busy for more than five years working on a small vegetable garden near her house, selling a little produce at the market corner. Ng. once worked as a factory worker at a shoe company, but when she reached retirement age, she had not contributed enough time to the SI system. Despite being advised by a social insurance officer about the disadvantages of withdrawing her SI once, Ng. still decided to withdraw a lump sum of 78 million VND. This money quickly disappeared due to the immediate financial needs of her daily life. "Now, when I think about growing older and weaker but still struggling with my vegetables, without a pension or health insurance card for medical care, while my neighbors receive their pensions every month, I feel heartbroken. I wish I had thought it through back then and not chosen to take a lump sum…" Ng. sighed with regret.

A different choice for others

Unlike Ng., Nguyễn Thị S., 62 years old (Tan Phong ward, Biên Hòa City, Đồng Nai), shared that she had worked as a factory worker and later took early retirement under the 176 scheme. Then, she worked again at a garment company and has now contributed to social insurance for 15 years and 9 months. This time, she was determined, no matter how difficult, even if her children didn’t support her borrowing money to pay for the remaining years of SI. She said to her children, "I've worked for many years, and after contributing to social insurance for over 15 years, I want to make this decision so I can have a stable monthly pension and not be a burden to my children and grandchildren." She also believes in the importance of a pension system that guarantees a stable income for workers in their old age, so she even advises her children, who work freelance, to save money for voluntary social insurance.

Social Insurance participation for a peaceful old age

With the goal of ensuring everyone has a "safety net" in their retirement years and lives comfortably in old age, the Đồng Nai Social Insurance Department has worked hard to raise awareness about the benefits of the social insurance system. The pension system is essential and deeply humanitarian, ensuring income when workers reach retirement age. Those who do not have a pension face financial difficulties and may even become a burden on their families and society. Therefore, even if workers face short-term difficulties or lose their jobs, they can preserve their social insurance contributions, and when they find employment again, they can continue contributing to qualify for a pension. If they are of retirement age but have not met the required contribution period, they can make a lump-sum payment for the missing years.

Retirement benefits for men and women is different

Under ISSA, The normal retirement age is defined in the plan rules (usually full benefits at age 65). Often reduced benefits are available at age 55.

In 2024, retirement age is 61 years old for men, 56.4 years old for women in Vietnam. However, the retirement age are different in other countries.  It is no secret that in virtually many countries, women earn less than men. Globally, the gender pay gap is 40 per cent. In other words, a woman earns 60 cents for every dollar earned by a man. This has many societal implications, of course, but what is often overlooked is the impact that this pay gap has on pensions and pension benefits after retirement.

Theoretical gender gaps in pensions, a report from the ISSA Technical Commission on Old-age, Invalidity and Survivors’ Insurance, examines some of the root causes of the gender gap in pensions and puts forward some considerations in addressing this issue.

There are three types of gender gaps:

A difference in the average monthly pension benefit received

A difference in the average monthly individual economic standard of living

A difference in the total lifetime amount of pension funding received

In terms of total pension funding received, analysis shows that the gender gap here is reduced or even reversed. Although women generally receive less in monthly benefits, due to their greater life expectancy, they will, on average, receive those benefits for a longer period. In Russia, for example, women have 32 per cent higher life expectancy than men, meaning that, over their lifetime, women will receive 22 to 25 per cent more than men in pension funding. Therefore, ISSA says that the primary reason for the gender gap in pension benefits is that women have lower lifetime earnings. Women, on the whole, receive lower wages. This can be partially attributed to the fact that women dominate in low-skilled, low-paying jobs and industries. Women have lower labour force participation rates – in part because of time taken out of the workforce to care for family members. And women work fewer hours, and more frequently as part-time worlers, perhaps in response to the needs of their families. Subsequently, correction measures have been taken to increase the final return of women’s contributions.