Progressing to E-insurance Policy

The Ministry of Labour, Invalids and Social Affairs in collaboration with the Social Insurance of Vietnam and the International Labour Organisation (ILO) recently held a forum on new social policy dialogue in Hanoi. Salary hikes and new social insurance policy in favour of labourers were in the limelight.

 

Speaking at the forum, Mr Pham Minh Huan, Deputy Minister of Labour, Invalids and Social Affairs, said, social insurance policy is the backbone of Vietnam’s social security system. According to statistics by the Ministry of Labour, Invalids and Social Affairs, Vietnam currently has 55 million people of working age. In addition, according to demographers, Vietnam is now in the stage of demographic bonus - the most favourable condition for strategic economic development goals. Nevertheless, only 12.5 million people buy social insurance policies. Or in other words, three-fourths of people at working age are not entitled to any public welfare regime. Therefore, Deputy Minister Huan proposed adjusting premiums and coverage. In general, workers want high pensions while employers argue that the increase in social insurance premiums will create financial pressures and affect corporate solvency. Hence, in the strategic orientation endorsed by the Ministry of Labour, Invalids and Social Affairs, premium and coverage rates will be further rationalised and sustained, he said.

 

He added that, while taking long-term policies into account, according to the so-called market mechanism, insurance diversity is necessary. The labour market has radical progress but workers are still complaining a lot. For that reason, issuing the policy framework is not enough and we need sanctions for serious enforcement. Notably, to change social insurance system, it is essential to apply the latest information technology to improve administrative procedures, simplicity and diversity to bring more social insurance benefits to workers and employers, he added.

 

Ms Celine Peyron Bista, a senior specialist in social protection from ILO, said that although Vietnam has made significant progress in improving social insurance coverage, ageing population will inevitably trigger a major challenge to the social insurance system of Vietnam in the future. By 2030, this figure will reach 21 million people, meaning that the dependency ratio of the elderly to the generation of working age will be 35.6 per cent in 2030, or a third of population will be elderly.

 

Mr Tran Hai Nam, Deputy Director of Social Insurance Department under the Ministry of Labour, Invalids and Social Affairs, revealed some information about new policies in the Social Insurance Law. The Social Insurance Law basically meets the needs of workers, employers and stakeholders. More specifically, the scope of social insurance and health insurance will be expanded; the level of sickness allowances will be increased; male workers will be entitled paternity leave when their wives give birth; pension parameters will be changed to increase pensions; and raised deduction rates will be applied to early retirements. Also, in 2016, two more subjects will be forced to join compulsory social insurance and employers will not retain 2 per cent of sickness and maternity funds. In 2018, two other groups will be added to mandatory social insurance and pension formula will be changed. By 2020, social insurance books will be replaced by social insurance cards and insurance will be made electronic, Nam said.

 

With respect to online social insurance book management, Deputy Minister Huan said that social insurance book management is one of weaknesses of Vietnam in issuing and implementing policies. Meanwhile, the goal of Government is to create the most favourable conditions for people to take part, and to share the best information. This means that insurance authorities still manage insurance affairs but they must share information about premiums and policies to employees and employers. Once electronic books are in circulation, everything will be very simple because every individual employee will be given a code number and they can check clear information about premium rates, he explained.

 

In addition, Mr Do Van Sinh, Deputy Director of the Social Insurance of Vietnam, said, according to the Social Insurance Law of 2014, labourers will have the right to manage their own social insurance books and they will be able to keep track of their insurance premiums easily. This is a ground-breaking approach to new social policies aimed at increasing monitoring rights for workers and ensuring policy transparency of authorities, he added.