The Summary Report on the implementation of laws on adjusting pensions, social insurance allowances (BHXH), and monthly allowances of the Ministry of Home Affairs shows that the Law on Social Insurance stipulates that pensions are adjusted based on the increase in the consumer price index (CPI), in accordance with the capacity of the state budget and the BHXH fund.
However, in the period 2016 - 2025, the pension adjustment level was always significantly higher than the CPI increase and exceeded the investment interest rate of the social insurance fund.
For example, in 2022, the investment interest rate of the social insurance fund was 4.19%, the CPI increase was 2.59% but the pension increase was 7.4%; in 2023, the investment interest rate of the social insurance fund was 4.36%, the CPI increase was 3.25%, pensions increased by 12.5% and 20.8% (depending on the subject).
The most recent pension increase was on July 1, 2024, with an increase of 15% compared to the June 2024 benefit level. According to a report by the Social Insurance agency, at that time, more than 3.12 million people receiving pensions, social insurance allowances and monthly allowances were adjusted to increase by 15%.
The additional funding in the last 6 months of 2024 to adjust according to the above increase is 16,786 billion VND, of which funding from the state budget ensures an additional increase of 3,597 billion VND, and funding from the social insurance fund ensures an additional increase of 13,189 billion VND.
The 15% increase in 2024 is almost the highest increase in the past 10 years (period 2016-2025). With the implementation of adjustments to increase at a fairly high level as above, it has helped increase pensions, social insurance allowances and monthly allowances; contributing to stabilizing and improving the lives of people who are enjoying social insurance benefits.
Including the 2016-2025 period, the total pension increase is 71.09%, while the total increase of CPI is 34.85%; the total investment interest rate of the social insurance fund is 67.28%.
The Ministry of Home Affairs assesses that the high pension increase in the past time not only does not ensure the "contributing - receiving" principle of the policy but also affects the ability to ensure the balance of the social insurance fund in the long term, especially when combined with the impact of population aging, causing the number of retirees to tend to increase annually.
The Ministry of Home Affairs is proposing to adjust the increase of pensions, social insurance allowances and monthly allowances by an additional 8% from July 1, 2026.
Former Deputy Minister of MOLISA (Ministry of Home Affairs) Nguyen Minh Huan agreed with the plan to increase pensions evenly by 8%. He said that this ensures the principle of contribution - benefit. At the same time, it is also suitable for the economic development situation and the country.
Currently, inflation is increasing, and prices of many essential goods are also increasing, so pension increases are necessary and need to be implemented soon to improve the lives of retirees. I think the pension increase plan of 8% for civil servants and public employees who are working is appropriate" - Mr. Huan expressed his opinion.
Meanwhile, Assoc. Prof. Dr. Tran Van Trung - University of Economics and Law, Vietnam National University Ho Chi Minh City, gave his opinion that in reality in Vietnam today, it is placed in the context of population aging pressure, balancing funds and budgets, there is no single "increase" that both ensures social security and is sustainable. The optimal option is a policy package, in which the pension adjustment method is only a component.
He proposed a pension adjustment mechanism in the direction of combining inflation indexing and targeted support for low-income groups, while accompanying parameter reform and developing a multi-layered pension system. This approach allows for a simultaneous balance between the fullness of benefits and financial sustainability in the long term.
