Proposal to expand the number of banks eligible to receive Social Insurance Fund deposits

On April 7, the Vietnam General Confederation of Labor organized a social criticism conference on the draft Law amending and supplementing a number of articles of the Law on Social Insurance 2024.

Mr. Nguyen Duy Cuong, Deputy Director of Wages and Social Insurance (Ministry of Home Affairs) said that the bill supplements the investment portfolio of the Social Insurance Fund (Social Insurance).

Accordingly, in addition to commercial banks controlled by the State as currently prescribed, Social Insurance Fund resources can be deposited at banks with state capital of over 50%.

Currently, the Social Insurance Fund can only deposit money at state-owned commercial banks, including Agribank, Vietinbank, Vietcombank and BIDV.

Professor Le Minh Thong, former Deputy Head of the National Assembly’s Law Committee, said that this regulation easily leads to risks. According to him, investing in the Social Insurance Fund is an important issue and needs to ensure safety when the fund is related to the welfare of tens of millions of workers.

“I propose to remove this proposal from the draft law. If there is no impact assessment or practical basis, it should remain as is,” he said.

Dr. Nguyen Dieu Hong, an independent expert, also said that the regulation on allowing banks to receive deposits from the Social Insurance Fund is “too big of a risk”, especially for the group of banks with 50% or more state capital. She believes that this is an accumulated amount that workers may not enjoy until 30 years later, so the drafting agency needs to review this proposal to ensure welfare benefits.

Sharing the same opinion, Mr. Nguyen Xuan Tuan, Head of the Legal Policy Department of Thanh Hoa Provincial Labor Federation, also proposed removing this content from the draft revised law.

Meanwhile, Mr. Vu Anh Tuan, Vice Chairman of the Vietnam Medical Union, said that if you want the fund to be profitable, you must invest, which means accepting risks. He assessed that ownership of over 50% of capital is a “reliable” ratio, so it is possible to consider allowing the Social Insurance Fund to deposit money at state-owned commercial banks and banks with 50% or more state-owned enterprise capital.

According to data from the Ministry of Finance, by the end of 2024, the Social Insurance Fund has a surplus of about 1.29 million billion VND with an average growth rate of 9% a year. By 2027, it is expected that 24.6 million people will participate in social insurance; 18.8 million people pay unemployment insurance and 99.3 million people participate in health insurance. People receiving pensions, monthly social insurance benefits, and unemployment benefits will also increase in the context of expanding coverage.

The draft Law amending and supplementing a number of articles of the 2024 Law on Social Insurance is expected to be submitted to the National Assembly for comments and approved at the first session of the 16th National Assembly, and will take effect from July 1, 2020.