VietNamNet Bridge – Vietnam has one of the fastest population aging rates in the world, which is a major challenge when it comes to dealing with pension and social welfare issues for the elderly, according to experts.

An old man is seen sleeping on a tricycle on a street in HCMC. The rapid aging of the population is a challenge for Vietnam when it comes to dealing with pension and social welfare issues for old people – Photo: Uyen Vien

General secretary of the Vietnam Insurance Association Phung Dac Loc told a recent seminar on pensions in Hanoi that the aging of the Vietnamese population is among the most rapid in the world.

It has taken Vietnam just 15 years to have an older population, Loc said, adding this would be a major challenge for society to take care of the elderly.

According to Ritsu Nacken, chief representative of the United Nations Population Fund (UNFPA) in Vietnam, old people made up 10.5% of the population last year and the percentage is forecast to rise to 23% in 2040.

However, nearly 20% of the elderly live under the poverty line and over one-third of them still work to earn a living, mainly in the agricultural and informal sectors with low and unstable incomes.

Ritsu said the economic slowdown in previous years impacted on the elderly the most as they had fewer chances of weathering the impact than younger people. Statistics showed that in the 2010-2012 period, incomes increased in almost all age groups in Vietnam, except for those aged between 65 and 80.

However, pension and social welfare policies have not changed in line with the rapid aging of the population. According to the Ministry of Labor, Invalids and Social Affairs, only 37% of the elderly have pensions and social benefits.

Tran Thi Thuy Nga, head of the social insurance department at the ministry, said the number of pension and social welfare beneficiaries is in decline due to the fast aging of the population.    

According to the General Office for Population and Family Planning, elderly people suffer 14 years of illness each on average throughout their lives and 95% of them have diseases with each suffering from two to three illnesses.

A study conducted by the Global Aging Institute (GAI) and Prudential in 10 regional countries including Vietnam in 2014 painted a gloomy picture for the elderly as well as expectations of the employees upon their retirement age.

According to GAI chairman Richard Jackson, most people in the region were anxious about their retirement security and 50% of respondents in China and 95% of respondents in Vietnam feared poverty and a lack of money after retirement.

In Vietnam, the survey showed that only 10% of respondents believed that their children or family members would be their main financial supporters when they retire.

To support the elderly, Ritsu suggested the Government improve the pension system combining State, private and social pensions to ensure minimum incomes for everyone.    

SGT