The content was announced by Vietnam Social Insurance when responding to the recommendations of 13 Business Associations on reducing social insurance payment rates when completing the draft Law on Social Insurance (amended).
BE CAUTION WHEN COMPARING INSURANCE PAYMENT LEVELS OF VIETNAM WITH OTHER COUNTRIES
Previously, 13 business associations proposed to bring the compulsory social insurance payment rate of employees and employers to the 2009 level. That is, employees pay 5%, employers pay 5%. 15% contribution, total 20%.
Regarding this recommendation, Vietnam Social Insurance said that the social insurance payment rate (payment rate and salary level as the basis for social insurance payment) is calculated, considered carefully and comprehensively in the Relationships such as: Correlation, compatibility with benefit level; Actual value of contributions and benefits; between the time of payment and benefits, the level of coverage of the regimes; sharing principles mainly for short-term regimes.
Social insurance payment rates are only considered for upward adjustment with a roadmap in the 2007 Social Insurance Law. From the 2014 Social Insurance Law to the current (amended) draft Law, this issue has not been considered. , to ensure stability and sustainability.
The social insurance payment rate in Vietnam is equivalent to some countries such as Singapore, China, Japan, Malaysia…, but the maximum pension rate in Vietnam is the highest in the region, even the highest in the world. gender.
According to current social insurance laws, the maximum pension rate is 75%, corresponding to a social insurance payment period of 30 years for women and 35 years for men.
Thus, currently the cumulative rate, that is, the pension rate corresponding to one year of social insurance payment in Vietnam, is on average 2.14% for men and 2.5% for women, while In countries like China and Korea, this rate is only 1%; The world average is only about 1.7%.
Regarding this issue, Ms. Ingrid Christensen, Director of the International Labor Organization (ILO) in Vietnam, said that excluding health insurance, the total contribution to Vietnam’s social insurance fund is 27 .5% of monthly salary.
According to her, this is a similar level to countries that design social insurance systems to provide similar security regimes as Vietnam. Some countries have lower contributions but at the same time the system offers much less. If not contributing to the fund, the employer must pay a number of benefits to employees when facing risks.
For example, Malaysia with a contribution rate of 26.7% is only 0.8% lower than Vietnam, but sickness and maternity benefits are paid directly by the employer. Or in some countries, when a work accident or occupational disease occurs, the employer must pay. However, letting the employer pay will be difficult to monitor and evaluate, and may even lead to disputes and lawsuits.
The Director of ILO Vietnam said that, according to some international labor standards, these benefits should best be paid through a system that ensures sharing and transparency.
In Vietnam, all security benefits are paid through the Social Insurance system and are supervised by the Government, National Assembly and society. Therefore, the ILO notes that it is necessary to be very careful when comparing contribution levels.
THERE ARE ENTERPRISES SEPARATE INTO 100 ALLOWANCES AND BENEFITS TO “DELIVER” INSURANCE PAYMENTS
According to Vietnam Social Insurance, Vietnam currently follows the model of calculating benefits in advance, so contributions always have to be kept up. In order to balance the durability of the Death Retirement Fund, associations are comparing with many countries that have this model. Paying and enjoying social insurance is not similar to our country.
The contribution rate is high and the benefit rate is high, but the actual pension of employees is low. In 2022, the average monthly pension will only reach 5.4 million VND due to the very low salary as a basis for paying social insurance. According to statistics in 2022, the salary used as a basis for calculating social insurance contributions of employees will only reach 5.7 million VND/month.
The Law on Social Insurance has stipulated that from 2018 onwards, the salary calculated for social insurance includes the total salary, salary allowances and other stable and regular supplements recorded in the labor contract, in order to each step closer to wages and real income of workers.
However, Vietnam Social Insurance said that in reality, many businesses do not fully implement it, separating employees’ income into many allowances and subsidies so that they do not have to pay social insurance.
Many businesses have three types of income: The type used as a basis for paying social insurance, the type used for settlement and actual income.
“There are businesses that divide into more than 100 types of allowances and benefits and the Social Insurance agency does not have enough legal basis to require businesses to calculate social insurance contributions,” Vietnam Social Insurance explained.
In principle, the pension benefit level is determined based on two factors: the payment time (to calculate the benefit rate), and the average salary as a basis for social insurance payment.
Therefore, the draft Law on Social Insurance (amended) has proposed to reduce the minimum number of years of social insurance payment to receive a pension from 20 years to 15 years, so that more workers can enjoy pensions. than.
However, the draft Law does not propose to increase the contribution rate, nor does it propose to reduce the pension rate to compensate for the reduction in social insurance payment time in these cases.
Therefore, Vietnam Social Insurance believes that the fact that businesses are raising the issue of reducing social insurance payment rates means that they must consider reducing the rate of social insurance benefits (rate of social insurance benefits). pension).
From there, the real value of the employee’s social insurance benefits will be lower than the minimum payment period of 20 years. Therefore, it is not suitable for the practical conditions and context of Vietnam.
From the above comparisons, it is difficult to judge whether Vietnam’s social insurance payment rate is high or low compared to other countries.
“The assessment of social insurance contribution rates needs to be considered in connection with the social insurance model in each country, the relationship between the payment level and the right to enjoy benefits, and macroeconomic factors, such as economic development, GDP per capita, economic structure, development of the labor market, labor costs”, Vietnam Social Insurance informed.