Raising retirement age not the only choice

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Raising retirement age not the only choice

Pham Thi Hai Chuyen, Minister of Labor, War Invalids and Social Affairs, said that aside from raising the retirement age, there have been many solutions proposed to maintain the balance of revenues and expenses of the social insurance fund. The Saigon Tines Daily had a talk with the minister over the issues on the sidelines of National Assembly (NA) discussion session on Monday. Excerpts: - The Saigon Times Daily: The revised Law on Social Insurance has drawn much objection from the public with many people saying that this is a step back in worker protection, especially the retirement age issue. What do you comment on this?

- Pham Thi Hai Chuyen: Objection is a normal reaction. While the drafting board has calculated long-term factors in the draft law, many NA deputies do not consider the issues that way. But on June 18, after listening to suggestions from NA deputies, the drafting board will look into regulations carefully to match expectations of deputies.

In the draft, employees working under tough conditions are not subject to the retirement age increase rule while others in some specific sectors will only comply with the rule after 2020. But many deputies have still disagreed at the regulation.

It means that revisions in the draft law are reasonable as the retirement age increase rule will be applied to civil servants in the near term. Do you think the people have misunderstood the issue?

- Yes, they have. There are two types of workers and those working in hard and toxic conditions are not subject to the rule. For other workers, for instance those in the garment and textile sector, the scheme will only apply after 2020. The scheme envisions raising the retirement age by four months every year and is designed for employees at State agencies only. Therefore, it is not right to say that all employees will be affected by the rule at the same time.

Raising the retirement age aims to prevent the social insurance fund from going bust. However, many people said that the retirement age has nothing to do with bankruptcy and they blame poor management for the danger. What do you think about this?

- It’s not right to think that there is no relation between the retirement age and the security of the fund. Longer social insurance payment time will help stabilize the fund. However, the retirement age is not the only cause. To secure the balance of revenues and expenses of the social insurance fund, there are still many solutions such as raising payments of both employers and employees, reducing benefits, improving fund management, and securing a high payment rate from most people. A retirement age increase is a part of the scheme but it’s not right to say that it does not lead to bankruptcy.

Some say that the management fee of the social insurance fund is too high, which is proposed at 3% of revenues. How do you explain this?

- In fact, we just have only used the interest on deposits made by this fund to cover the management fee. The draft proposes that the management fee not exceed 3% of the interest. I think that deputies are right. We should not use the fund but taking a part from the State budget and a part from the interest.

Some NA deputies have said that shortcomings of the draft are a step back in worker protection. What do you think?

- I disagree at the suggestions. In fact, the draft law mentions many new issues with an aim to protect employees. In fact, earlier, employees obtained 45% of their wage after 15 years of work but now, they will get it after 20 years while the retirement age will be lifted. They don’t want it and neither do we.

In the long term, we have to secure stable development of the fund. The risk of fund bankruptcy is likely to occur in 2034 as warned by the International Labor Organization (ILO) if we don’t apply suitable measures now. Therefore, we have to find many solutions to improve fund management and realize specific policies in the insurance sector. Besides, the drafting board has to listen to suggestions of deputies.
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