Prime Minister Pham Minh Chinh (R) receives Yoshitaka Shindo, Japanese Minister in charge of the CPTPP__Photo: VNA

Chinh made the statement when receiving Shindo Yoshitaka, Japan’s Minister of State for Economic and Fiscal Policy and Minister in charge of Economic Revitalization, New Capitalism, Startups, Infectious Disease Crisis Management, and Social Security Reform, and the CPTPP, in Hanoi.

The PM said in addition to the CPTPP, Vietnam and Japan are also members of many other free trade agreements and economic cooperation frameworks such as the Regional Comprehensive Economic Partnership (RCEP), ASEAN-Japan Comprehensive Economic Partnership Agreement (AJCEP), the Vietnam-Japan Economic Partnership Agreement (VJEPA), and most recently the Indo-Pacific Economic Framework for Prosperity (IPEF). These cooperation frameworks play an important role in promoting trade, investment and business relations between the two countries to a new level.

To continue to bolster bilateral cooperation between the two countries, the Prime Minister called on the Japanese Government to maintain cooperation with and support Vietnam in the cause of national industrialization and modernization based on science, technology, innovation, green growth, digital economy, circular economy, sharing economy, and knowledge-based economy.

He hoped Japan will continue to share experiences and cooperate with Vietnam in the field of agriculture, climate change response, coping with population aging; education and training, people-to-people exchange and tourism.

Chinh also asked for Japan’s assistance for Vietnamese businesses to participate in the global supply chain, production chain, and distribution chain.

Agreeing with the Vietnamese Prime Minister, the Japanese minister said that the areas of cooperation that the PM mentioned to contribute to the development of both Vietnam and Japan.

He said Japan hopes Vietnam will continue to coordinate closely with Japan and other CPTPP members to effectively implement the agreement.

The minister proposed that Vietnam coordinate with Japan to promote cooperation with specific programs and projects, especially in the fields of trade, investment, innovation, entrepreneurship, education, training and labor.

Social Security Reform Options

The Social Security trustees project that, by the mid-2030s, the system will no longer be able to pay all scheduled benefits. Which reform option should policymakers pursue to help balance the system?
Use our interactive tool to compare how different groups would fare, over time, under the following policy options. 
Current law scheduled pays Social Security benefits as promised, even after the trust fund runs out.
Current law payable reduces Social Security benefits by a uniform amount after the trust fund runs out so that all benefits in each year can be paid out of revenues from that year.
Increase the full retirement age (FRA) indefinitely raises Social Security’s FRA (now set at 67 beginning in 2022) and the age for receiving delayed retirement credits by one month every two years, beginning in 2024.
Increase the early eligibility age (EEA) and FRA raises Social Security’s EEA (now set at 62), FRA, and the age for receiving delayed retirement credits by one month every two years, beginning in 2024.
Reduce cost-of-living adjustment (COLA) ties beneficiaries’ annual COLA to the change in the chained consumer price index (CPI), which grows more slowly than the standard CPI now used to compute COLAs.
Change the benefit formula” applies Social Security’s progressive benefit formula to each year of wage-indexed earnings and then sums the top 40 values divided by 35. It also makes the benefit formula more progressive.
Increase benefits taxation taxes Social Security benefits as normal pension income, beginning in 2020, but also raises the standard deduction that taxpayers ages 63 and older can claim on their federal income tax returns.
Increase the tax base raises the cap on annual earnings subject to the Social Security payroll tax and that enter the benefits calculation to cover 90 percent of payroll. This increase is phased in over 10 years, beginning in 2016.
Two methods of analysis adjust outcomes for differences in household size. The first method simply divides outcomes by the number of household members, generating per capita measures. The second method uses the equivalence scale developed by the US Census Bureau for calculating supplemental poverty rates, which recognizes savings in household spending from shared living arrangements.

Viet Nam is one of the fastest aging societies in the world. Rising longevity and declining fertility have combined to swell the number of older persons needing care and reduce the number of workers supporting them. While in 2015 there were about six working-age adults for one older person above 60 years, in 2055 it will only be two workingage adults per older person. This means that tomorrow’s so-called “sandwich generation” will face an increased burden of caring for three generations. In the absence of pensions, the responsibilities of society are also heavier. Ensuring universal protection in old-age is hence not only beneficial for older persons, but also for families.

Currently the coverage of social insurance in Viet Nam is merely 27% of the labour force. By 2030 the number of people above 65 with a contributory pension is projected to be less than two million leaving around ten million without a pension.

In May 2018, Resolution 28-NQ/TW on MPSIR was approved, representing a breakthrough on social policy in Viet Nam. MPSIR brings Viet Nam closer to the most advanced economies in the world in regard to social security policies, particularly through its focus on comprehensive and integrated approaches to address contemporary social security challenges. ILO contributed to shaping the MPSIR by assessing the current social security system, recommending possible options for the reform through technical papers, and supporting policy dialogues with workers, employers and other stakeholders.

The resolution also established the goal of universal social protection coverage, aligning Viet Nam’s policies with international commitments and obligations such as the right to social security in the International Covenant on Economic, Social and Cultural Rights, the ILO Recommendation on Social Protection Floors (R202) and the UN 2030 Sustainable Development Agenda. The decision to reach universal coverage through both contributory (social insurance) and non-contributory (tax funded) benefit sets Viet Nam on a similar path to neighbouring countries with universal coverage such as Japan, South Korea, China or Thailand.

Proposed incremental reforms such as the gradual increase in retirement age, equalizing the qualifying ages for men and women for retirement age and old-age benefits, and aligning replacement rates to international levels will all contribute to ensuring the long-term financial sustainability of the system. These are essential elements of the reform to guarantee that the system respects and furthers the rights being acquired today.