The International Labour Organisation (ILO) in conjunction with the Ministry of Labour, Invalids and Social Affairs (MoLISA) on August 22 announced an important report, indicating the need for a comprehensive reform in Vietnam’s pension scheme.

According to the report, which was conducted by ILO with support from MoLISA, Vietnam’s social security fund may experience a shortfall by 2021 and be depleted by 2034.

Apart from providing forecasts on the fund’s future paying capacity, the report also suggested Vietnam needs to make necessary changes to its policies on social insurance and pensions in order to reinforce the fund’s sustainability.

The report said that this is an urgent action in the context of great changes in the population structure, low ratio of contributors to the pension scheme and limitations of social insurance enforcement.

Gyorgy Sziracki, Director of ILO in Vietnam, said it is necessary for the Vietnamese Government, employers and workers to find ways to ensure their long-term pension payment scheme.

In order to improve the future financial balance between contributions and benefits of the fund, ILO recommended Vietnam increases the retirement age for both men and women to 65, while further developing voluntary insurance programmes.

Addressing the announcing ceremony, Deputy Minister of MoLISA Pham Minh Huan underlined the significance of the report, saying that it will serve as a foundation for Vietnam to make laws on social insurance and pensions.

The Vietnam Social Security covers Vietnamese citizens with employment contracts of three months or longer. However, the implementation of the law is a big challenge for Vietnam as only one-fifth of employees make contributions to the social security fund.

ILO’s report is expected to support Vietnam in amending its social insurance law, which is scheduled to be adopted next year by the National Assembly.-VNA