Retirement age will now rise gradually from 2021

Retirement age will be rised since 2021

Deputy Prime Minister Vuong Dinh Hue told the National Assembly (NA) last week that from 2021 onwards, the government “will revise the retirement age under a very cautious and proper roadmap, so as to ensure both the nation’s target of retirement ages and the difference between men’s and women’s retirement ages.”

Hue explained that for special professions, the retirement age can deviate by five years from the existing retirement ages, which are 55 for women and 60 for men. “I want to stress that the NA will conduct thorough discussions before making a final decision.”

According to him, retirement ages are “a very sensitive issue” impacting tens of millions of people, including active workers and people about to enter the domestic labour market.

“We must apply a strict roadmap in order not to shock the labour market. The revision of retirement ages will first have to rely on economic growth and solving unemployment,” he said. “If we don’t generate jobs for those preparing to enter the labour market before raising the retirement age for existing workers, then we should not raise it at all. Thus, we will have to focus on production development and creating new employment.”

Minister of Labour, Invalids, and Social Affairs Dao Ngoc Dung reported to the NA last week that in addition to hundreds of thousands of jobless people in rural areas, over 215,000 university graduates, including many with master’s degrees, are unemployed.

“These people must be provided with jobs in the near future,” Dung said.

“It takes up a large portion of social resources and threatens social stability. Unemployment must be resolved before an increase in retirement ages is applied,” Canh stressed.

Many NA deputies agree, including Vu Thi Luu Mai, representing Hanoi, saying that if retirement ages are raised immediately, the country will face social disorder and young people will find fewer employment opportunities. Also, it is not very likely that this policy would be welcomed by the majority of Vietnamese people.

Challenged by an ageing population and dwindling social welfare funds, Vietnam is planning to increase the existing retirement ages for both men and women. On May 12, 2018, the 7th plenary session of the 12th Central Committee of the Communist Party of Vietnam released three major resolutions, including one on social insurance reform, stressing the need for raising retirement ages. According to the Ministry of Labour, Invalids, and Social Affairs (MoLISA), the Labour Code 2012 will be revised to raise retirement ages.

The MoLISA proposed two scenarios on raising retirement ages, starting from January 1, 2021. The first is to increase the retirement age to 60 for women and 62 for men, with a three-month increase added to the retirement age in each successive year. The second scenario is to lift the retirement age to 60 for women and 65 for men, with a four-month increase added to the retirement age in each successive year. The existing retirement age of 55 for women and 60 for men has been in place since 1960.

However, the International Labour Organisation (ILO) proposed to create a roadmap and start implementing an increase slowly and gradually in order to give people time to adjust and let the economy develop further. “The only problem we still have is the difference between men and women. The difference between men’s and women’s retirement ages is an issue. People say that it is fair for women to retire earlier because during their lives, a majority not only work, but also carry a lot of the responsibilities in taking care of the family, which makes it more tiring for them,” said Nuno Cunha, ILO senior specialist on social security.

“People also say that women should retire earlier because their health is not as good as men’s. This is a lie. On average, the life expectancy for women is higher than for men. In principle, women’s health after the child-bearing age is as good as or even better than men’s,” Cunha said.

“By retiring earlier, women receive a lower pension because they have contributed less and at lower wages than men, while living longer. This is why a fair approach would be to move toward the same retirement age for both men and women, to offer women equal opportunities to retire with a higher pension.”