The pension and retirement funds system is a core ingredient of the social security policy in many countries. Although the most advanced systems exist only in industrialized and highly developed countries, they also exist in some form or the other in developing states as well.
Across these countries, there are many features that vary, such as the level of control people have to withdraw and invest their money and savings, how much the government regulates these funds, and the conditions for their transfer to another country, in the case that people decide to retire somewhere else.
Microfinance and provident fund Vietnam – Globaleye Vietnam is mostly managed by the national organizations, while other smaller government and semi-government entities also play a small part.
The state pension system in Vietnam is managed by the Social Insurance Agency only. It is required for people working in official and non-official capacities, even though some businesses can choose to not apply it for their employees.
Employees are required to contribute a portion of their monthly income to the scheme. After retirement, they have the choice to either take the money in a lump sum, or receive a pension for the duration of their life when they have contributed for 20 or more years.
Differences In Employment Sectors
Contributing to the state pension scheme is common for people in the public and private sector, but people who choose to contribute or save even more, can choose privately managed schemes as well.
It must also be understood that the lowest income earners will often not be able to contribute to these schemes in addition to making payments to their state pension accounts.
Things are bleaker for those who are self-employed as laborers for instance, since they will usually not be able to make payments even to the state pension, and therefore receive nothing when they reach retirement age.
Savings And Investment Products
Even though the cost of living in Vietnam in general is low, there are certain important items that cost too much, such as advanced medical treatment, cars, and property. For these costs to be less daunting, there is definitely a space for savings products that produce generous profits.
There is also the additional challenge of the relatively young people realizing the importance of saving for when they retire, since this is thought to be a little unusual.
Microfinance Provided By Private Banks Or Organizations
The microfinance products or opportunities for the private organizations are limited, both, in terms of regulation, and scale.
Currently private entities and banks serve a very small segment of the country’s population, with the state pension scheme on the other hand, serving more than 7 million people.
Even this number is pretty low when you consider the fact that the country’s population as a whole is expected to come close to 100 million by 2025.
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