The Vietnam Social Security (VSS) held a workshop in Hanoi on March 6 to share experience in sustainable social security amid population aging. Vice Minister of Finance and Director General of VSS Nguyen Thi Minh attended the event. 

Overview of the workshop  (Source: VSS)

Attending the event were UK Ambassador to Vietnam Giles Lever, standing member of the National Assembly's Economic Commission Do Van Sinh, VSS Deputy Director General Nguyen Dinh Khuong, chief expert of Ernest & Young global retirement services Josef Pilger and representatives from the Ministry of Labour, Invalids and Social Affairs, the Vietnam Chamber of Commerce and Industry, the Vietnam Women's Union and international organisations. 

In her opening speech, VSS Director General Minh said there are nearly 7 billion people worldwide now, with one ninth at least 60 years old. The United Nations Population Fund (UNFPA) forecast that the world population will hit 9.2 billion by 2050, with one fifth 60 years old and above. 
 

Vice Minister, Director General of VSS Minh said population aging impacts every socio-economic aspect such as economic growth, investment, labour, health care and social welfare (Suource: VSS)

According to her, population aging is currently a global issue and concern of regional and global leaders, affecting every socio-economic aspect such as economic growth, investment, labour, health care, social welfare and infrastructure, posing major challenges and exerting long-term impacts in socio-economic development, including social welfare and health care for the elderly. 

In 2014, people aged above 60 accounted for 10.2 percent of the population in Vietnam. Demographers from the UNFPA said Vietnam had entered the period of population aging, three years earlier than forecast. To cope with such challenges, the Vietnamese government issued the Law on the Elderly, the National Action Programme on the Elderly and other policies, particularly social welfare policies targeting the elderly to meet their needs. 

Minh said difficulties in social security need to be considered. For example, 65.7 percent of rural residents live on agriculture, 70 percent of old people do not have cash savings and 18 percent live in need, more than 70 percent of the elderly still work to earn a living with the support of their relatives while only 25.5 percent live on pension or social welfare. 72.3 percent of Vietnamese elderly live with their children and grandchildren. 

Population aging also poses challenges to Vietnam's health care system such as high health care costs, increase in the cases of chronic diseases, limited health care services for the elderly and a shortage of medical workers and caregivers. 

Minh described Vietnam as a low middle-income country with the world's fastest aging rate. The building and fine-tuning of policies, especially social security policies in general and retirement policies in particular, pose challenges to not only the VSS but also the entire political system. 

The workshop provided a platform for experts to share experience in policy building, improve the efficiency of VSS management and investment to foster a sustainable pension system. 

Deputy Director of the VSS's International Cooperation Department Nguyen Khang said the country's pension system features compulsory and voluntary pensions based on participants' contributions (employers and workers). Pension entitlements are calculated based on proportions of average salaries, with a maximum of 75 percent. 

He said Vietnam's pension system benefits from strong commitment from the political system, stable legal regulations, sustainable economic growth and a wide network of VSS chapters which facilitates the application of modern technology. However, the numbers of social insurance participants in the non-State sector and pensioners remain low while the ratio of pensioners with the highest entitlements is high and the lifespan of retirees is increasing.

To achieve the goal of having half of workforce joining social insurance by 2020 and providing allowances for old people aged above 75 without pensions and social insurance by 2030, Khang stressed the need to develop a multi-layered social insurance system, expanding social insurance coverage in the informal sector and especially among female workers, adjusting policies to ensure long-term and sustainable VSS fund balance and adopting information technology in management. 

Chief expert of Ernst & Young global retirement services Josef Pilger commented that employers' commitment to pension and social insurance policies remains weak, retirement age is low and investment from the pension fund is limited. 

He suggested the Vietnamese government consider several key contents for retirement policy reform, such as Vietnam's vision and strategy towards pensions and social welfare policies that suit economic development process, the necessity for pension and social welfare reform, key measures and relevant impacts. 

At the event, participants discussed challenges to the pension system, countries' experience in expanding social insurance coverage, rapid population aging and solutions. 

Speaking in conclusion, VSS Deputy Director General Nguyen Dinh Khuong noted that social insurance policies in general and pension policies in particular need to be revised on par with socio-economic development, saying that feedback at the event will provide invaluable help in fine-tuning social insurance policies and social welfare policies. 

To strengthen managerial capacity and develop VSS towards professionalism, modernity and better satisfaction of businesses and people, Khuong wished that international organisations would continue providing technical and financial support and partner with VSS in the future.

International Cooperation Department