The retirement age in Vietnam, currently 60 for men and 55 for women, may be gradually raised to 62 and 60, respectively. (Photo: thanhnien.vn)Hanoi (VNA) -The retirement age in Vietnam, currently 60 for men and 55 for women, may begradually raised to 62 and 60, respectively, beginning in January 2021, theMinistry of Labour, War Invalids and Social Affairs (MoLISA) has proposed.
MoLISA offered thesuggestion in a draft revision of the Labour Code, but also included the firstoption of leaving the retirement age unchanged.
If the change isimplemented according to the second option, the retirement age will increase by6 months annually until it is 62 years old for men and 60 years old for women.If a male labourer retires in 2020, the retirement age will be 60 as currently.However, if he retires in 2021, the retirement age will be 60 years and 6months. If he retires in 2022, the retirement age will be 61 and so on.
The main reason for raisingthe retirement age, according to MoLISA, is to ensure the balance of pensionfund and fund for survivor benefits in the long run. If the current regulations- the payment and duration of the benefit – are kept unchanged, the pensionfund and fund for survivor benefits will lose their balance.
Calculations by theInternational Labour Organisation predict that the retirement and survivorfunds will face revenue shortfalls beginning in 2023, forcing the government tosubsidise the pension system beginning in 2034.
To ensure the fund’ssustainable operation without raising the retirement age, either employees andemployers will have to pay larger social insurance contributions or employeeswill receive smaller retirement pensions, MoLISA said.
However, lifting the socialinsurance contributions of employees and employers will increase theirfinancial burdens and decrease their competitiveness. And lower retirementbenefits will have a negative effect on pensioners’ lives. Therefore, raisingthe retirement age is considered to be a stronger option.
Results from surveysconducted by MoLISA showed that many workers continued to work after retiring.In many cases, after finishing retirement procedures, they signed labourcontracts with their former employers in order to earn additional income andbecause they wanted to continue their work in order to make use of theirexperience and knowledge.
The draft revision of theLabour Code will continue to be discussed and is to be submitted to theNational Assembly at the May 2019 session.-VNA
VNA
