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Orientation to upgrade policy of voluntary social insurance

26/03/2013

Within the cooperation framework of 2013 between the Institute of Labour Sciences and Social Affairs (ILSSA) and the Institute of Hanns Seidel (HSF) of Germany, on 21 March 2013, ILSSA organized the Workshop of Orientation to upgrade Policy of Voluntary Social Insurance, a scheme relevant to non-formal sector. Deputy Minister Doan Mau Diep attended the workshop and delivered a key-note speech.




     Mr. Axel Beubert, Local Representative of HSF in Vietnam shares his view that it is not only Vietnam but other countries, especially the developing ones, have also suffered difficulties in development of voluntary social insurance system applied to non-formal sector. To improve the situation, it is necessary to build a long-term strategy, and the objectives of voluntary social insurance and other social security policies must be linked with national socio-economic development objectives.
 
     At the workshop, a group of authors of ILSSA present their research on implementation of voluntary social insurance policy and characteristics of the workforce in the non-formal sector. Despite the geographic limit – surveys are only carried out at two districts Hanoi, namely Thanh Xuan and Dong Anh – the survey findings are relevant to the general condition of the country. In the survey locations, workforce of the non-formal section occupies 70% of the labour force, and 33% of them live in rural areas. Capacity of financial saving for risk prevention is low, they mainly base on support of friends and relatives, and their capacity of buying voluntary social insurance is low. Average income is the most influence factor, and an increase of average income of 1% will lead to an increase of 0.43% of voluntary social insurance buyer. Number of buyers also relates to age group: 55% of people over 40 when asked state they want to buy the voluntary social insurance. Households who have buyers of compulsory social insurance also have a high number of voluntary social insurance buyers. About 2/3 of buyers of voluntary social insurance are transferred from compulsory scheme.
 
     Vice Director of ILSSA Luu Quang Tuan presents the assessment report which includes recommendations for approval of the research works. Luu Quang Tuan states that the foundation of voluntary social insurance system facilitates a bigger part of the workforce to have access to social insurance service, even if a part of them no longer in the group of compulsory buyers. Furthermore, policy of voluntary social insurance is designed to have a greater sustainability of its financial fund, thus reduce the risk of financial abuse of the fund. However, the percentage of voluntary buyers is relatively low, about 139,000 buyers in 2012, or about 1.3% of total social insurance buyers. Reasons are current premium rates are not attractive and communication related to voluntary social insurance is limited, 60% of buyers know about the scheme through their friends and relatives, only a few of them know about the scheme through mass media, effort for promotion to increase the coverage is limited.
 
    The research reports recommend stronger efforts of communication and promotion to increase community awareness improve data base of buyers and upgrade the current policies.
 
     Speaking at the workshop, Deputy Minister Doan Mau Diep comments that the research works has collected key characteristics of the non-formal sector’s workforce. However, it should clarify high potential groups of buyers of voluntary social insurance, and have relevant information and communication modes to increase the coverage within a specified roadmap. And therefore it is necessary to implement relevant and timely adjustment with more attractive promotion to buyers.
 

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