The low contribution rate, in addition to the low actual salary of many workers, is also due to the fact that social insurance contributions are not at the correct level of salary and actual income at some employers.
Data from the Ministry of Labor, Invalids and Social Affairs shows that in 2022, the average salary for compulsory social insurance is 5.73 million VND/month. Although the current Social Insurance Law currently stipulates that the salary used as the basis for paying social insurance for employees includes both salary and allowances. However, as recorded by the social insurance agency, some businesses still “circumvent” the law, dividing allowances into support amounts to avoid paying or not paying enough social insurance.
This fact has been clearly pointed out by the Ministry of Labor, Invalids and Social Affairs. There are many businesses that separate employees’ income into many items, except for the basic salary and many other allowances and additional income. Therefore, the basic salary as a basis for paying social insurance is often lower than the employee’s actual income.
The income level used as a basis for paying social insurance for employees is always at the lowest level, so even though the maximum benefit rate is up to 75%, the employee’s pension is still low.
The International Labor Organization (ILO) assesses that reducing the rate of social insurance contributions means a decrease in the rate of pension entitlements. This leads to the real value of employees’ social insurance benefits being lower than the current level. This is not consistent with the current conditions and practical context of Vietnam.
Monitor contribution levels from actual income
To improve pensions, Vietnam cannot only rely on annual pension increases; it is important to have a roadmap to increase contributions, helping social insurance participants stay in the system until the end of the year. when the working age ends. That way when you get old, your pension will be enough to live.
The revised Social Insurance Law also needs to stipulate an increase in contribution rates close to the employee’s actual income, at least equal to 70 – 80% of the employee’s monthly income.
Currently, with salaries and benefits paid through accounts, state management agencies can completely monitor social insurance contributions through the monthly income of employees. Specialized inspection agencies can completely monitor salary payments and social insurance contributions through the banking system to ensure that workers’ social insurance contributions are based on actual income.
Monitoring income to increase social insurance premiums needs to be mandatory, especially in the context that the revised Social Insurance Law is proposing to reduce the time to participate in social insurance to 15 years to enjoy pension, receiving great support from workers. .
When the time to participate in social insurance is short, it is necessary to increase the payment level so that the pension can ensure the life of those who join social insurance late.
This is a legitimate need of all those who have paid, are paying, and will pay social insurance to ensure a living pension when they retire.
Vu Diep
