No competition between the voluntary retirement program and retirement insurance

Retirement Insurance is carried out based on a contract not the same as the authorized management Retirement Insurance program. Photo: Internet

In response to the correspondent’s concern about competition between the current Retirement Insurance products with the Voluntary Supplemental Retirement Program just approved by the Government in implementation of Decree No.88/2016/ND-CP from the beginning of July, 2016, Ms.Ha confirmed that there is no competition due to the various implement method.

To date there are 6 Insurance Companies which have been allowed to deploy Retirement Insurance, they are: Bao Viet, Prudental, Daichi, AIA, Manulife and PVI Sunlife. The accumulation to June 30 is nearly 300 billion vnd with about 15 thousand persons participating mainly due to the enterprises buying insurance policies for employees, said by Ms. Ha.

Retirement Insurance products have been implemented according to the provisions of Insurance Business Law and carried out based on a contract which had been concluded between the Insurance Company and the enterprises or inviduals that participate in Retirement Insurance.

Meanwhile, from August 1, 2016, the Government issued Decree No.88 on the Voluntary Supplemental Retirement Program. This program is carried out on the basic of the authorized management Retirement Insurance program.

Accordingly, the fund management company or Insurance enterprise must meet certain conditions and be licensed by the Ministry of Finance, it will be authorized to manage Retirement Insurance programs by businesses or emplyees authorized to paticipate. In future, the Ministry of Finance and the Ministry of Labour, War invalids and Social Affairs will issue specific guidles about the conditions of paticipation of the fund management company or Insurance enterprises.

“Because of the different implementation methods, one side carries out on the basis of the insurance contract and the other is responsible for authorization, so there is no competition, said by Ms.Ha.

From the point of view of social security, the 2 types mentioned above should be encouraged to be implemented for the purpose of ensuring the rights of employees when they retire, as well as to contribute to social security in the difficult condition of the State budget.