One of the requirements of the economy for people is to ensure the right to social security with a minimum income and to ensure access to basic social services for everyone. In each person’s life, it is not always possible to have a stable source of income to meet living needs. How to ensure life, meet living needs, at least minimally, when people are old, weak or at risks? The social safety net was created to ensure income for those who unfortunately lose or decrease their income due to health, old age; unemployment or other reasons.

According to the International Labor Organization (ILO), “Social security is the protection that society provides to individuals and households in order to ensure access to health and income guarantee, especially in case of old age, unemployment, sickness, disability, labor accident, maternity or lack of caregivers”. To ensure the satisfaction of different needs and subjects of social security, the social security system is organized into a security net. Typically, a social security net includes: Firstly, the job settlement support system. Second, the social insurance system. Third, the social support system. Fourth, the basic social service guarantee system.

The components of the social security net are in relations and interact with each other towards performing the function of the social security net, which is to prevent risks, protect people and promote evolution. Thus, the social security net is a system that aims at building an economy for people through income guarantee and access to basic social services for all, particularly focusing on supporting groups of disadvantaged people in society. They are the elderly, the disabled, women, children and the poor. Building a social safety net that covers the entire population ensures everyone can access and enjoy social security is a requirement of the economy for people.

Results of construction and implementation of social security net in Vietnam

Resolution No. 15-NQ/TW dated June 1, 2012, of the 5th Plenum of the 6th Central Committee “On some social policy issues for the period 2012 – 2020”, set a determination to develop Vietnam’s social security system that is consistent with a middle-income country and with international standards, ensuring increasingly better basic human rights. Then, at the 7th Plenum of the 12th Central Committee, the Communist Party of Vietnam clarified the orientation and solutions for reforming social insurance policies in Resolution No. 28-NQ/TW, dated May 23, 2018 “On social insurance policy reform”. The resolution points out reforms including: 1- Building a multi-layer insurance system, including three tiers: The first tier is a social retirement allowance for the elderly who do not have a pension or a monthly social insurance. The second one is basic social insurance, which includes compulsory and voluntary social insurance based on contributions of employees and employers. The third one is supplementary pension insurance according to market principles so that employees and employers have more options to contribute in order to enjoy a higher pension.

Adjusting the minimum period of participation in social insurance to enjoy retirement in a flexible way, adjusting the pension calculation based on the principle of contribution - benefit, fairness, equality, sharing and sustainability. This consists of expanding the subjects participating in compulsory social insurance; strengthening linkages and support between social insurance policies as well as policy flexibility to achieve the goal of expanding coverage; increasing the number of workers participating in social insurance in the informal sector; amending regulations on premium rates and payment bases to achieve the goal of expanding social insurance coverage

Reforming in formulating and organizing the implementation of policies to strengthen confidence and increase the level of satisfaction of participants in the social insurance system.

Implementing the adjustment to increase the retirement age according to the roadmap. This includes overcoming the unreasonableness of the pension insurance regime in the direction of flexible eligibility conditions, stricter regulations on enjoying the lump-sum social insurance regime and increasing the actual average retirement age of employees; adjusting the accumulation rate to reach the maximum pension benefiting rate in line with international practices. Adjustment of pension is relatively independent in relation to the salary o f working people, changing the way of adjusting pension towards sharing.

Diversifying the investment portfolio, structuring the investment of the Social Insurance Fund according to the principles of safety, sustainability and efficiency.

To further improve the social safety net in Vietnam towards an economy for people, it is necessary to build a multi-layered social security.

At the first tier is basic social security, which provides basic security, income security and basic living conditions for people. Social security is affirmed as a basic human right and the first layer in the social security model is responsible for ensuring the basic level of security for all people. In fact, the first layer ensures basic social security targeting vulnerable populations in terms of security, including children, the elderly, the disabled without income, the poor and the underemployed who are unable to self-ensure social security. Basic social security guarantees these people access to basic welfare services, even though they may not be able to contribute.

In the second tier, social security is based on workers’ mandatory or voluntary contributions. The pillar of the second tier is the social insurance system based on the contributions of workers and employers. Accordingly, all employees and employers participate in paying social insurance premiums at the prescribed rate and are entitled to the social insurance regime in case of loss of income due to illness, disease, or loss of health, employment, maternity, or post-retirement. The level of social insurance benefits is partly based on the contribution level and partly on the principle of sharing among the subjects participating in social insurance. The payment-enjoyment regime ensures fairness between the public and private sectors, between compulsory social insurance and voluntary social insurance. In addition to the social insurance regime, this target group often has conditions to enjoy basic (and advanced) social services, job support in case of joblessness, and social assistance in case of unfortunate circumstances of getting risk.

If the second tier is based on compulsory and voluntary social security at a predetermined level, the third tier is enhanced social security for individuals and households who want to enjoy higher social security. Households and individuals can buy more social insurance to have a high pension when they get old, or they can buy additional health insurance for better care. They can also contribute to good social service in the form of socialization.

With this security net, all people are guaranteed minimum social security, everyone has guaranteed income and access to basic social services. This is the foundation for building an economy for people in Vietnam.