Vietnam is looking at two options to raise the retirement age for both men and women as part of changes to the country's social insurance policies.

Minister of Labor, Invalids and Social Affairs Dao Ngoc Dung presented the options at a conference held by the legislative National Assembly in Hanoi on Monday.

The first option would raise the retirement age to 62 for men and 60 for women, by adding three months to the current retirement age every year until they reach the new retirement age.

The second option would increase it to 65 and 60 respectively, by adding four months to the current retirement age every year.

The current retirement ages for men and women in Vietnam are 60 and 55, respectively.

“By increasing the retirement age step-by-step like this, it won’t be such a shock to people,” said Dung.

During the conference, a change to the minimum amount of years spent paying social insurance to be eligible for a monthly pension was also proposed.

The minimum amount of years required would drop to 15 years from the current 20 years under the proposal.

“In the short-term, we plan to reduce the minimum number of years to 15, but in the future, we may cut it to 10,” said Dung.

These two proposals will be presented during the 7th Plenum of the Party Central Committee in May.

The subject of increasing Vietnam’s retirement age has been hotly debated among experts, some of whom say it could exert pressure on the country’s labor market.

Last year, Nguyen Huu Dung, former director of the Institute of Labor Science and Social Affairs, said raising the retirement age would only suit people with professional qualifications and management skills. The ministry should leave it unchanged for those working in the public sector, and lower it for those who do physically demanding and dangerous jobs.

"The ministry hasn't researched the matter properly, while a survey conducted by the Vietnamese Trade Union found that 70 percent of workers want the retirement age to remain unchanged,” Nguyen said.

Vietnam currently has about 600,000 functioning businesses, but only 230,000 businesses are paying into the country's compulsory social insurance scheme, said Minister Dung, citing data from the General Department of Taxation.

There are about three million laborers in Vietnam who don't have social insurance, according to data from the ministry.

Vietnam reached a turning point in 2015 when it started to become one of the countries with the fastest aging populations in the world, the ministry said in a report in 2016.

The number of Vietnamese people over the age of 65 will rise from 6.3 million last year to a projected 18 million by 2040, accounting for more than 18 percent of the population and transforming Vietnam from a young society into an old one, the report quoted the United Nations as saying.

If the current retirement age remains unchanged, the country’s social insurance fund may fall short by 2020 and would be exhausted by 2037, Vietnam Social Insurance predicted.

According to the United Nations Development Program, if Vietnam fails to create jobs, develop social security and improve quality of life before the working age population peaks, it will risk instability in the future, including a lack of workers and an increased need for health care for the elderly.

By Hoang Thuy - VnExpress.net - April 25, 2018