Rapidly aging population threatens Vietnam’s pension system: experts

By Minh Hung, Thanh Nien News

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A 84-year-old woman with her great-grand daughter. Experts have urged Vietnam to improve social welfare for older people as Vietnam's population is aging rapidly. Photo: Minh Hung A 84-year-old woman with her great-grand daughter. Experts have urged Vietnam to improve social welfare for older people as Vietnam's population is aging rapidly. Photo: Minh Hung

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Rapid aging will leave Vietnam with one third of population over 60 years old in 2030, seriously overloading its fragile social welfare and pension system, according to a conference on Wednesday.
“Vietnam’s population has been aging too fast. The proportion of the elderly in less than 20 years will become equal to Japan's while per capita income in Vietnam is much lower,” said Nguyen Ngoc Quynh of the United Nations Population Fund (UNFPA).
Income insecurity will threaten independence, dignity and self-esteem of older people, he said.
With its population entering aged phase, Vietnam will also face harmful trans-generational consequences.
A migrant worker in Hanoi, who wanted to remain unnamed, said he has been supporting his parents over the past years.
“However, things have become more difficult, especially when my children began to go to school. I am afraid that I could not support them and my younger siblings further,” he said.
Government statistics show Vietnam has more than 9.5 million people of 60 years old and over in 2014. Nearly half of them do not have any pension or financial support.
The government currently grants support to older people of 80 years old and over. However, the support of merely VND80,000-180,000 (US$3.7-8.3) a month barely meets their basic needs.
Worse challenges
With a rapidly aging population, Vietnam will face many challenges in improving its pension and social welfare for the elderly, experts said.
A World Bank’s report released last month found that East Asia and the Pacific is aging faster than any region in history, driven primarily by a rapid decline in fertility and increased longevity.
Transitioning from an aging to an aged society, where people of 65 and above account for 14 percent or more of the total population, took the UK 45 years, the US 69 years and France 115 years.
For Vietnam, this transition would come in a mere 15 years, and complete well before the 2040s, the report forecast.
According to a 2013 survey by UNFPA, more than 30 percent of the elderly in Vietnam are still working and most are self-employed with low and unstable income.
Older people in Vietnam are still working for an average of 35 hours a week for men and 32 hours a week for women, according to the survey.
Quynh said that ensuring stable income for the elderly is become more important for Vietnam.
A policy to improve income of the elderly in Mexico has seen a 7 percent reduction in the number of older women suffering from mild depression, he said.
While nearly half of older people in Vietnam do not have pension, the social insurance fund is already facing threats of being overloaded, prompting proposals to increase retirement age.
In Vietnam, retirement age for men is 60 and women is 55. Vietnam Social Insurance has proposed to increase that to 62 for men and 60 for women.
Quynh said that aging does not only affect a small population group.
“It’s also a shock that hit any individual, family and the society and an important issue to consider for any one in any age group,” he said.
The government should find answers to the questions like how people’s income sources change as they age or how traditional systems of family support change.

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