VietNamNet Bridge – Vietnam is now at its peak of the golden population with young people making up a majority, but also at the threshold of population ageing. As the number of old people is on the rise, the Government has considered many solutions to prevent the foreseeable collapse of the pension fund in the near future as the aging workforce is on the road to retirement. Among the solutions, the plan of raising the retirement age has drawn mixed reactions from the public.  

Illustrative image -- File photo

Pham Minh Huan, Deputy Minister of Labor, Invalids and Social Affairs, at a meeting on Tuesday said the revised Labor Code will revise up the retirement age of females from 55 to 58 or 60, and that of males from 60 to 62. The move is expected to prevent Vietnam’s social insurance fund from running out of money due to population ageing.

Increasing the retirement age was previously proposed to the National Assembly but rejected. The ministry will therefore continue to collect opinions from related agencies and experts. The draft of the revised code is currently open for expert and public feedback, and is expected to be ready for submission to the law-making body in 2017, Huan says.

At a press conference last week, Minister and Chairman of the Office of the Government Mai Tien Dung said a rise in the retirement age is unavoidable and it has been seen in many other countries. The retirement age has not changed for a long time in Vietnam but there have been many changes in living standards, especially life expectancy.

According to the ministry, the proportion of elderly people in Vietnam is increasing rapidly, from 6.9% in 1979 to 10.5% at present. It is predicted that by 2050, Vietnam will have about 10 million elderly people. With the current policy, by 2050 the pension fund would become insufficient to pay for pensioners in 2051.

Celine Peyron-Bista, an analyst at the International Labor Organization (ILO) on social insurance in ASEAN, says on the local news site Vietnamnet that Vietnam’s population is aging very quickly. Life expectancy increased from 66 in 1990 to 76 in 2014. If the current retirement ages are applied, the ratio of retirees to people of working age would be 59.5% in 2049 and 77.7% in 2099, from 19.4% in 2009.

While the number of people of working age is falling, Vietnam needs to increase the retirement age to balance its pension fund. The retirement age of women should be the same as that of men, as a matter of equality. People employed in hazardous conditions are currently able to retire earlier.

Le Dinh Quang, deputy director of the Department of Labor Relations under the Vietnam General Confederation of Labor, tells Lao Dong newspaper that it is the right time to discuss the retirement age issue.

Vietnam has been boosting international integration, so it should follow international labor standards, particularly equality between men and women. For public employees in administrative offices and scientists, they would remain fit to continue working when they reach their retirement age. Many people have talked about increasing the retirement age for these workers, Quang adds.

While many officials and experts have thrown support behind the suggestion, laborers have expressed concern over the bad impact of the policy.

Hoang Van Thanh, a teacher from Nghe An Province, says in Tuoi Tre newspaper that the proposal is not reasonable. Most workers in Vietnam start working in their 20s and they spend 35 to 40 years working.

“To raise the retirement age, one would have to consider a range of factors, such as socio-economic conditions, incomes, pensions and even unemployment among youths. The Government should only raise the retirement age of high-quality intellectuals and scientists. Elderly people are usually slow and conservative. Therefore, keeping them at work may drag the entire system back. Besides, if older staff stay in their positions longer, younger people would have less opportunities for promotion. The health of older staff after working longer is also a matter of concern,” he says.

Lawyer Truong Dinh Cong Vinh from the HCMC Bar Association even suggests the Government maintain the current retirement age. The nation’s life expectancy has increased theoretically, but living standards are low due to pollution, diseases and unsafe food. People also have to suffer from poor economic growth, so they should not suffer impacts of the pension fund bankruptcy.

“I have not seen any explanation for the state of the social insurance fund. We should discuss and solve the problem. Many people are afraid that the fund is run by a bulky and ineffective machinery. If necessary, private and foreign companies can join the social insurance market. If the fund is running out, we should consider solutions such as investment instead of just depositing money at banks,” he says.

SGT