In the draft Circular guiding the adjustment of pensions, social insurance allowances (BHXH) and monthly allowances, the Ministry of Home Affairs proposed two pension adjustment options.
Option one, some groups are given an increase of 4.5% and an additional 200,000 VND/month compared to the benefit level of June 2026, while the remaining groups are given an increase of 8%.
The second option is to simultaneously increase by 8% on the benefit level of the month immediately preceding the adjustment time for all subjects subject to application.
Advantages and limitations of 2 options
Discussing this issue, Assoc. Prof. Dr. Tran Van Trung - University of Economics and Law, Vietnam National University Ho Chi Minh City - said that each option has certain advantages and limitations, reflecting two different approaches between insurance principles and social security goals.
According to Mr. Trung, the simultaneous increase according to the ratio has clear advantages in simplicity, transparency and ease of implementation. More importantly, this adjustment method ensures the principle of "contribution - benefit", people who contribute a lot and contribute for a long time will enjoy a corresponding increase. However, the biggest limitation of this option is that it does not significantly improve the lives of low-income groups.
With the simultaneous increase, people with high pensions will continue to receive more increases in absolute value, leading to the gap between groups not only not narrowing but also possibly widening" - Mr. Trung analyzed.
Conversely, the option of increasing by 4.5% and adding 200,000 VND/month (the "hybrid" option) is assessed to have better social regulation. When combining the proportional increase and the absolute increase, people with low pensions will enjoy a higher percentage increase, thereby helping to narrow the gap between groups.
He gave a specific example, assuming a person has a pension of 3 million VND/month, the increase of 4.5% is equivalent to 135,000 VND, plus 200,000 VND, the total increase is 335,000 VND, equivalent to about 11.2%. Meanwhile, a person with a pension of 10 million VND/month will increase by 450,000 VND from the 4.5% part and add 200,000 VND, totaling 650,000 VND, equivalent to about 6.5%.
Thus, low-income people are increased less in absolute value but higher in proportion; conversely, high-income people are increased more in amount but the increase rate is lower.
Overall, the "hybrid" option helps pull low-income groups up faster, thereby enhancing social equity in the pension system" - Mr. Trung assessed.
Reasonable policy design and sufficiently transparent communication
However, the "hybrid" option also cannot avoid certain impacts on the principle of "contribution - benefit". The absolute increase not linked to the contribution level may relatively reduce the proportionality between contribution and benefit, even if it does not completely break the insurance principle.
In addition, changing the correlation of interests between groups also entails psychological reactions. According to experts' analysis, people with high contributions may feel that their increase is relatively lower than the low-income group, thereby giving rise to the psychology of "disadvantage".
This phenomenon largely stems from the relative comparison effect when the beneficiary not only looks at their own increase but also compares to others.
However, according to Assoc. Prof. Dr. Tran Van Trung, these reactions are natural consequences when there is an adjustment in the correlation of interests. In a modern social security system, balancing fairness based on contributions and social justice is an inevitable requirement.
The issue is not to eliminate the "hybrid" option, but to design reasonable policies and ensure sufficient transparency and persuasive communication to minimize negative psychological reactions," Mr. Trung emphasized.
Accordingly, the pension adjustment plan in the direction of combining increased rates and targeted support is still considered a suitable choice in the current context. This approach allows both maintaining the principle of contribution - benefit at a basic level and strengthening the regulatory role of social security policies, towards the goal of fairness and sustainability in the long term.
