"Increasing the retirement age to 65, Vietnam will have more than 5 million more workers/year"

Speaking at the National Assembly on the afternoon of October 30, Professor Nguyen Thien Nhan (HCMC delegation) warned that Vietnam is currently facing two major challenges: the risk of pension fund imbalance in the future and the requirement to achieve a growth rate of 10% per year in the next 20 years.

According to him, breakthroughs in increasing labor productivity and ensuring stable labor scale are two core solutions, in which increasing the retirement age is a strategic policy to ensure long-term labor resources and social security.

Professor Nguyen Thien Nhan speaks at the plenary session on the afternoon of October 30 (Photo: QH).

What happens to pension funds when the population is aging rapidly?

Professor Nguyen Thien Nhan cited many countries that have had high growth rates for decades but still cannot ensure a standard of living for retirees.

"South Korea is a typical example. After 43 years of average growth of more than 9%/year, the country's third largest pension fund in the world is still forecast to go bankrupt by 2055. China also warned that its state pension fund will run out by 2035 when the number of retirees increases from 300 million to 400 million," said the delegate.

According to him, the core cause is the prolonged low birth rate, which has caused the number of workers to decrease, while the number of elderly people has increased rapidly.

"In 2023, in Korea, for every 3.3 workers, there will be one retiree. By 2055, there will be only 0.8 workers to support one retiree," he said.

The HCMC delegate said that a similar situation is forming in Vietnam. In 2000, each retiree was "supported" by 7 workers, by 2025 there will be only 4.3 people, by 2045 there will be 2.4 people and by 2100 there will be only 1.3 people.

Professor Nhan calculated that the rule in Korea and China is that after 37 years of peak labor force, the pension fund becomes unbalanced. Applying the calculation to Vietnam, risks to such a fund will appear around 2070.

He said that if there is no reform soon, pensions could decrease sharply, like in South Korea - where 40% of pensioners are classified as relatively poor. Therefore, the delegate recommended that before 2030, a comprehensive social insurance reform project should be developed so that retirees can still have a decent life, commensurate with the country's development.

Adding 5 million workers/year is equal to the population of a country.

According to Professor Nguyen Thien Nhan, the GDP growth target of 10% per year is feasible if labor productivity increases dramatically and the labor scale does not decrease.

"In the 2021-2025 period, if productivity increases by 5.1%, labor must increase by 1.14% per year for GDP to reach 6.3%. But from 2025, the labor force will peak and begin to decline," he said.

It is forecasted that in the 2026-2030 period, the labor force will only increase by 0.7% per year, while to achieve a GDP of 10%, it needs to increase by at least 1.45%. Without compensatory measures, the actual growth rate will only reach 7-8% per year.

"Therefore, there needs to be a breakthrough in labor productivity through science and technology, innovation and digital transformation, while effectively utilizing existing human resources," he analyzed.

In addition, the former Secretary of the Ho Chi Minh City Party Committee argued that the current average retirement age in Vietnam is 59 for men and 54 for women and is on track to gradually increase to 62 for men (completed in 2028) and 60 for women (completed in 2035).

"If Vietnam continues to raise the retirement age to 65 like many countries, the workforce will add more than 5 million people each year," he said.

According to his calculations, this number is equivalent to the population of a developed country like Finland, Norway or Denmark. Increasing the retirement age in the next 10 years will help Vietnam have enough labor to achieve the growth target of 10%/year without having to depend on the young population as before.

Professor Nhan suggested: "We need to soon have a roadmap to increase the retirement age before 2035 to take advantage of this valuable resource, and at the same time, we must have a solution to increase the birth rate from 1.91 to 2.1 before 2035 so that the labor force does not decrease and to ensure sustainable development of the economy, people and nation."

According to the 2019 Labor Code and Decree 135/2020/ND-CP, the retirement age of employees working under normal conditions is adjusted according to the roadmap: from January 1, 2021, male employees are 60 years and 3 months old, female employees are 55 years and 4 months old, then each year male employees increase by 3 months, female employees increase by 4 months.

By 2025, the retirement age for male workers will be 61 years and 3 months, and for female workers it will be 56 years and 8 months.

The roadmap will continue until it reaches 62 years old for male workers in 2028, and 60 years old for female workers in 2035.

In some special cases such as those doing heavy or toxic jobs or working in areas with special socio-economic difficulties, workers can retire earlier than the normal age but not more than 5 years.

Dantri.com.vn

Source: https://dantri.com.vn/lao-dong-viec-lam/tang-tuoi-nghi-huu-len-65-viet-nam-se-co-them-hon-5-trieu-lao-dongnam-20251030150153839.htm