HANOI (Reuters) – Vietnam is trying to raise the retirement age of both men and women to mitigate the economic impact of a rapidly aging population and take pressure off of its depleted social welfare funds.
The Labour Ministry wants to get the issue on the agenda of parliament having faced resistance from legislators fearful that by keeping people in work longer, the younger generation might have problems getting jobs.
Vice labour minister Pham Minh Huan on Wednesday said the aim was to gradually raise the retirement age to take advantage of the current workforce while keeping the social insurance payouts manageable.
It wants to raise the retirement age by two years to 62 for men, and make it a three-year increase to 58 for women. Huan said retirement ages should vary in different industries, according to proposals the ministry will complete next month.
A young and cheap labor force is among the factors that has been attracting a rush of foreign investment into Vietnam, which hit a record $14.5 billion last year.
About 70 percent of the 90 million population is of working age, according to the World Bank, which says Vietnam is aging at one of the world’s fastest rates and at a much lower income level than other countries showing the same trend.
Of concern to the government is pressure on social insurance schemes, which the International Labour Organization (ILO) has predicted would be exhausted by 2034 if policies are not overhauled.
The Labour Ministry’s plan appears to be in line with what the ILO has recommended for Vietnam, saying a lifting of the retirement age would offset a future decrease of the working-age population and keep pension schemes sustainable.
(Reporting by Mai Nguyen; Editing by Martin Petty, Robert Birsel)