In light of a Ministry of Labour, Invalids and Social Affairs (MoLISA) proposal to hike the pension age to avert social insurance fund from possible collapse, deputy chairman of National Assembly’s Committee of Social Affairs Bui Sy Loi warned of group-based interests moving in focus.
Could the increased pension age help avert a social insurance fund collapse?
Hiking the pension age is necessary to help balance contributions and allowance payments associated with the social insurance fund. However, it is only one aspect.
To radically remove the danger the fund could run out, it is important to handle diverse measures in a synchronised manner, like setting suitable contribution/allowance payment rates, diversifying contributors, striving to reach the target all people joining social insurance.
The MoLISA said the pension age hike proposal would target specific groups of people, including those with high technical skills and management labour. Does this worry you?
In fact, when amending the Labour Code, we have decided on extending the pension age to specific people groups including those with high professional skills and some management manpower (Item 3, Clause 187, the Labour Code), but extended time at most five years and following two conditions - these people not participating in management, the employers having the requirement and the labourers themselves have the demand.
In my view, that proposal is rational to reach the target of bringing forth these people’s capacity and as well as ensuring the social insurance fund balance.
However, the group-based interests would arouse once the move was handled in a way lacking transparency and objectively. Some people, holding management posts, would possibly insist on holding up their power and position.
In fact, there were retired age managers who wanted to leave to work for private businesses with more alluring remuneration. Some others with lower capacity wanted to hold on their posts. If top managers, held at their post after reaching retired age, failed to meet work requirements, it could break their business management planning in the future.
As stated above, hiking pension age to people with high technical skills and management skills is a proper step, but it also depends on the health and capacity of the labourers and employer requirements before making a final decision.
How should pension age be hiked to ensure efficiency?
Many experts assumed starting from 2018, pension age to woman workers would be added one more year in every two years, while that for man workers one more year after several years, so as by 2028 proposed retired age for women would reach 60 and for men from 62-65. This will help address labour shortages when the country population faces aging threat.