People wait at the social security office of Quynh Luu district in central Nghe An province to request for lump-sum payments. (Photo: VNA) According to Vietnam Social Security (VSS), 4.23 million people newlyregistered for social insurance between 2016 and 2021, but during that period,4.06 million members left the scheme.
Under the current social insurance law, an employee who has paid socialinsurance premiums for less than 20 years may request a lump-sum pay-out ofbenefits after 12 months from the time he/she stops paying social insurancepremiums.
Thach Sa, a 45-year-old migrant worker in HCM City, opted for lump-sumwithdrawal one year after he lost his job due to COVID-19.
His wife and children left the city for their hometown in Tra Vinh provincesince the pandemic broke out. He tried to stay in the city, take a part-timejob to settle down and ran motorbike taxi in his free time but still could notafford expenses.
“I planned to stay in the city but after the pandemic, life was instable. Idecided to withdraw lump-sum social insurance payment and make investment inother work,” he told Vietnam News Agency.
Nguyen Thi Tran, 42, another worker who lost job due to layoff in HCM City,said: “It’s difficult to look for a new job now due to old age.”
She decided to ask for lump-sum benefits to get back to her hometown with herfamily.
Those stories reflect common willing of vast majority of workers in HCM Citywho lost jobs due to the pandemic due to a fall in orders and layoffs.
They want to request for lump-sum social insurance payment afterreceiving unemployment allowances.
In April this year, a large number of workers lined up in front of Hoc Mon district’ssocial security office to withdraw lump-sum payments.
Tran Dung Ha, deputy director of the HCM City Social Security, said about40,000 labourers applied for lump-sum withdrawal in the first quarter of thisyear, an increase of 6.1% compared to the same period last year.
The office has paid slum-sums to 25,000 workers.
According to VSS, since 2016, the number of employees withdrawing socialinsurance has continuously increased with the annual statistics higher than theprevious year. This not only affects the retirement life of workers but alsohas negative impacts on the State’s social security goals.
Most of workers thought the withdrawal would help them through short-termchallenges. Others heard a rumour that the amended social insurance law allowsonly 50% of lump-sum withdrawal.
Le Van Muoi, 36 years old, from Thanh Hoa province, said: “Idecided to withdraw right now because I heard that next year when the new lawtakes effect, employees can withdraw only half of the lump-sum payment.”
Facing two options of withdrawing all money one time or waitinguntil retirement to enjoy benefits, many employees said they need the money nowor worry the pension is low, so claiming lump-sum is the best choice.
Huynh Van Phat, a 45-year-old worker at a processing unit inDistrict 7, HCM City, said old workers like him easily get fired for lowproductivity while looking for a new job is difficult.
“Can we wait until retirement age to claim the insurance? Will the pension beenough to live on?” he said.
In spite of almost 20 years of social insurance premium, he opted for lump-sumwithdrawal to get budget to invest in other plans.
Trade union officials said many employees taking jobs with high intensity suchas garment, leather footwear, electronics have their health declinedconsiderably after the age of 45. Most businesses tend to lay off old workersand recruit younger ones to pay low wages.
Nguyen Van Hai, chairman of Binh Tan district’s Labour Federation, said thepension regulated in the current social insurance law is quite low and cannotmeet basic needs.
He said one of his acquaintances who used to be trade union vice chairman of abig company got the monthly pension of 2.7 million VND, which is not enough tolive on.
HCM City has more than 45,000 retired people receiving monthly pension paymentsof below 3.8 million VND – lower than the average income of the city's povertystandards.
Pham Thi Hong Yen, chairwoman of trade union at Intel Products Vietnam Co.,Ltd., said many workers only receive a pension of 2-3 million VND per month.
“The pension is lower than the regional minimum wage as thecurrent regulations," she said.
"This does not encourage employees to make long-term commitment to thesocial insurance system.”
Amended social insurance regulations related to retirement age andlump-sum withdrawals have stirred public debates.
Vo Thị Huynh Tram, human resources director of Sonion Vietnam Co.,Ltd., said the retirement age of 60 years for women and 62 years old for men istoo high. In fact, many workers who joined the social insurance system earlyand completed insurance premium contribution are not old enough to receivepensions. Having to wait for pension for so long has made employees quit theirjobs to enjoy lump-sum benefits.
Many experts proposed adjusting retirement age based on number of years payinginsurance premiums. The retirement age of 60 years for women and 62 years oldfor men is applicable at office employees but not appropriate for labourersworking in toxic environment.
The amended social insurance law has two options for lump-sum payment.
The first option allows the employee to receive full pay-out for the entireperiod of participating in social insurance and then would not be entitled tomonthly pension.
As per the second option, the employee would receive a lump-sum payment for atmost half of the period of contribution to the retirement and survivorshipallowance fund. The remaining period would be reserved for calculation ofsocial insurance benefits when the employee reaches the retirement age.
Tran Van Trieu, director of legal consultation centre under HCM City LabourFederation, said the second option will create chaos in labour relations,stirring the recent trend of lump-sum withdrawal.
Le Van Thanh, former head of the Department of Socio-Cultural Research, HCMCity Development Research Institute, said based on surveys, workers over theage of 40 often withdraw lump-sum social insurance because they want to solvefamily problems or change careers. Withdrawing only half of the money does nothelp workers much.
For example, if an employee withdraws 200 million VND one time, he or she canbuy a vehicle, open a small shop or repair a house. However, if they areallowed to withdraw 100 million VND, they cannot solve the immediate urgentneed. Meanwhile, the remaining 50% of social insurance cannot guarantee a pensionenough for them to live when they retire, he said.
Tran Dieu Thuy, chairwoman of HCM City Labour Federation, said the secondoption proposed in the draft law has caused worry among labourers, making themto head to social security offices to request for lump-sum withdrawal.
She said there should be long-term solutions to ensure jobs and stabiliseincome so that labourers will retain in the social insurance system untilretirement, making contributions to stabilising national social welfare./.
VNA
