social insurance in vietnam - imf · aging population and expanding social insurance in...

AGING POPULATION AND AGING POPULATION AND EXPANDING SOCIAL EXPANDING SOCIAL INSURANCE IN VIETNAMINSURANCE IN VIETNAMINSURANCE IN VIETNAMINSURANCE IN VIETNAMCapacity Building Seminar on Enhancing S S S f GSocial Spending in Support of Inclusive Growth in Asia

July 14-15, 2015, Colombo, Sri Lanka

Nguyen Dang Khoa

Ministry of Finance, Viet Namst y o a ce, et a

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OUTLINEOUTLINEOUTLINEOUTLINE

Aging Population in Vietnam Aging Population in Vietnam Social Insurance in Vietnam Challenges and Changes Recommendations Recommendations

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AGING POPULATION IN VIETNAMAGING POPULATION IN VIETNAMAGING POPULATION IN VIETNAMAGING POPULATION IN VIETNAM

AGE STRUCTURE OF VIETNAM POPULATION (2009 -

%

100.0%

AGE STRUCTURE OF VIETNAM POPULATION (2009 2049

40 0%

60.0%

80.0%

0.0%

20.0%

40.0%

9 0 2 3 4 5 6 7 8 9 0 2 3 4 5 6 7 8 9 0 2 3 4 5 6 7 8 9 0 2 3 4 5 6 7 8 9

2009

2010

2011

201 2

2013

2014

2015

2016

2017

2018

2019

2020

2021

202 2

2023

2024

2025

2026

2027

2028

2029

2030

2031

203 2

2033

2034

2035

2036

2037

2038

2039

2040

2041

204 2

2043

2044

2045

2046

2047

2048

2049

0-14 15-59 60+

2009 2015 2020 2025 2030 2035 2040 2045 2049

0-14 24.5% 23.4% 23.0% 22.0% 20.4% 18.8% 17.9% 17.6% 17.6%15-59 66.9% 67.0% 65.4% 63.9% 63.2% 62.5% 61.4% 59.4% 57.6%60+ 8.7% 9.6% 11.6% 14.1% 16.5% 18.7% 20.7% 23.0% 24.8%

Source: Population Projection for Viet Nam 2009 - 2049 (GSO, 2011)3


2009 2017

40 44

50-54

60-64

70-74

80+

50-54

60-64

70-74

80+

0-4

10-14

20-24

30-34

40-44 Nữ

Nam

0-4

10-14

20-24

30-34

40-44 Nữ

Nam

6,000.004,000.002,000.00 0.00 2,000.004,000.006,000.00

0 4

6,000.004,000.002,000.00 0.00 2,000.004,000.006,000.00

0-4

2032 2049

40 44

50-54

60-64

70-74

80+

Nữ 40 44

50-54

60-64

70-74

80+

Nữ

0-4

10-14

20-24

30-34

40-44 Nữ

Nam

0-4

10-14

20-24

30-34

40-44 Nữ

Nam

6,000.004,000.002,000.00 0.00 2,000.004,000.006,000.00 6,000.004,000.002,000.00 0.00 2,000.004,000.006,000.00

Source: Population Projection for Viet Nam 2009 - 2049 (GSO, 2011)4


Source: Live Longer and Prosper: Aging in East Asia and Pacific (WB, 2016)

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Aging characteristics in Vietnam Aging characteristics in Vietnam◦ The ratio of the oldest old (80+) will be

higher

◦ The aging speed in Vietnam is among highest

◦ The ratio between elderly female and yelderly males is increasing at higher age.

◦ The aging rates are noticeably differentThe aging rates are noticeably different among regions and provinces

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Are they challenges to social insurance?7

SOCIAL INSURANCE IN VIETNAMSOCIAL INSURANCE IN VIETNAMSOCIAL INSURANCE IN VIETNAMSOCIAL INSURANCE IN VIETNAM

Functions of Vietnam Social Security Functions of Vietnam Social Security (VSS)◦ Manage the Social Insurance (SI) Fund

and the Health Insurance (HI) Fund

◦ Collect SI and HI contributions from employees and employers.p y p y

◦ Make payments on retirement pension and other social security benefitsand other social security benefits (maternity, health care, funeral)

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Connection with other government Connection with other government agencies◦ Ministry of Labour, Invalids and Social Affairs: y ,

cooperation in implementation of the Law on Social Insurance, report to the MOLISA on the management of the SI Fundthe management of the SI Fund◦ Ministry of Health: cooperation in

implementation of the Law on Health I h M H hInsurance, report to the MoH on the management of the HI Fund◦ Ministry of Finance: cooperation in financial◦ Ministry of Finance: cooperation in financial

mechanism for SI and HI funds, report to the MoF on the financial management of the f d ti l l / dit dfunds, particularly revenue/expenditures and investment

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SI contribution mechanism: SI contribution mechanism:◦ Employees contribute 8% of their

S fcontracted salary to the SI fund

◦ Employers contribute 18% of their emloyee’s contracted salary to the SI fund

◦ PAYG basis: the fund get the contribution gfrom current workers and use that money to pay benefit for current beneficiaries, p y ,and the future beneficiaries will get the benefit from future contribution

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SI benefits SI benefits◦ Pension: male at age 60, female at age

f S55 having not less than 20 years of SI contribution, are eligible to receive

ipension

◦ The amount of monthly pension is calculated by formula, but not excess 75% of the legal average monthly salary.

◦ Employees could have other social security benefit such as maternity y ypayment (6 months), sickness supports, and funeral payment 11


Revenues and expenditures of SI fund Revenues and expenditures of SI fund◦ Revenue: contributions from employees

fand employers; income from investment; support from state budget, and other sources

◦ Expenditures: pensions and other social security benefits, authorized investments

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Revenues and expenditures of SI fund Revenues and expenditures of SI fund

Renenue and Expenditures – Social Insurance Fund (2009 – 2015)

No Items 2009 2010 2011 2012 2013 2014 2015

Unit: bil. VND

Revenue 37,557 49,914 62,509 89,992 106,861 130,770 145,880

1 Compulsory SI 37,488 49,740 62,258 89,613 106,305 130,059 145,053

2 Voluntary SI 69 174 251 379 556 711 8272 Voluntary SI 69 174 251 379 556 711 827

Expenditures 28,419 35,188 44,261 59,097 75,690 86,266 101,201

1 Compulsory SI 28,419 35,163 44,237 59,043 75,590 86,106 100,891

2 Voluntary SI 0,67 25 24 54 100 160 310

Source: Vietnam Social Security

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Coverage of SI fund Coverage of SI fund

C f S i l I F d (2009 2015)

No Items 2009 2010 2011 2012 2013 2014 2015

Coverage of Social Insurance Fund (2009 – 2015)Unit: Person

1 Compulsory SI 8,901,170 9,441,246 10,104,497 10,436,868 11,023,846 11,451,530 12,319,866

2 Voluntary SI 41,193 81,319 96,400 139,643 187,753 196,254 254,643

Total 8,942,363 9,522,565 10,200,897 10,576,511 11,211,599 11,647,784 12,574,509

% of population in working age (15-59)

15.5% 16.2% 17.1% 17.4% 18.2% 18.8% 20.1%

Source: Vietnam Social Security

working age (15 59)

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CHALLENGES AND CHANGESCHALLENGES AND CHANGESCHALLENGES AND CHANGESCHALLENGES AND CHANGES

Challenges to SI in short term Challenges to SI in short term◦ SI contribution delay and avoidance

Scause losses in SI revenue

◦ Cash is still dominant while ATM is not popular in pension payment

◦ IT application in VSS could not connect ppthe system nationwide

◦ Very minor role of private sector in SIVery minor role of private sector in SI

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Challenges to SI in long term Challenges to SI in long term◦ SI coverage is small

◦ PAYG basis cause inequality between younger and older generations

◦ Aging population causes threat to the sustainability of SI fundy

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New Law on SI launched in 2014 New Law on SI launched in 2014, effective in 2016 with many changes◦ Extend SI coverage to cover other types

of employees

◦ Extend the contribution period to receive full pensionp

◦ Reporting every 6 months

◦ Introduction of supplementary pension◦ Introduction of supplementary pension fund

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Targets of SI: Targets of SI: National Strategy on SI development by 2020 (announced in 2013)2020 (announced in 2013)◦ Coverage: 50% of population in working

age (15 59) by 2020age (15-59) by 2020◦ Modernization: nationwide connection

within SSV by 2017 inter-agencieswithin SSV by 2017, inter-agencies connection by 2020◦ Standardization: Application of ISO◦ Standardization: Application of ISO

9001:2008 through out SSV administrative system by 2016ad s a e sys e by 0 6

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RECOMMENDATIONSRECOMMENDATIONSRECOMMENDATIONSRECOMMENDATIONS

Extending coverage of SI Improving connectivity and database Participation of private sector Participation of private sector Changing PAYG basis

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Thank youThank you

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social insurance in vietnam - imf · aging population and expanding social insurance in...

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