[02 Oct 2015] —  About 95 per cent of Vietnamese labourers are worried about poverty and having insufficient funds once retired, according to a recent survey by the Global Aging Institute (GAI) in collaboration with Prudential Corporation Asia.

The survey, dubbed "From Challenge to Opportunity", unveiled its findings from a major study on retirement attitudes and expectations in 10 countries in East Asia.

Tran Thi Thuy Nga, head of the Social Insurance Department of the Ministry of Labour, Invalids and Social Affairs, said about 62 per cent of elderly people in Viet Nam do not have pension or social welfare assistance.

"This means that the coverage of pension with the elderly has not been improved much, especially when the population ageing rate of Viet Nam is increasing," Nga said.

Statistics from the General Department of Population and Family Planning showed that 95 per cent of elderly Vietnamese have at least one disease in their lifetimes. Of that demographic, the average person lives about 14 years with a disease.

Most of the elderly are taken care of by their children or work by themselves and do not have savings, the department's research also revealed.

According to the survey, an overwhelming majority of respondents in every market – ranging from 77 per cent in China to 90 per cent in Hong Kong, Indonesia, and the Philippines – agreed that the government should require workers to save more money for their own retirement.

In most markets, a majority of respondents also agreed that the government should raise the retirement age, increase taxes to offer a basic pension benefit to the elderly in financial need and require workers to contribute more to pay for government pension programmes.

Dr. Richard Jackson, founder and president of GAI, said the findings show that retirees in East Asia find themselves at a difficult juncture. Traditional family support networks have been weakening, yet adequate government and market substitutes have not yet been put in place.

In every market, the share of modern workers who expect to receive income during retirement from insurance and annuity products and stocks, bonds, and mutual funds is rising.

In China, Hong Kong, Malaysia, Singapore, South Korea, Taiwan and Thailand, between 60 and 80 per cent of workers expect to receive income from these financial assets.

Yet, in the Philippines, Indonesia and Viet Nam, less than 25 per cent of today's workers will turn to those options for financial stability.

Donald Kanak, chairman of Prudential Corporation Asia, said rapid aging in Asia is an irreversible trend that poses many challenges for today's societies. He added that closing the growing gap in old-age protection requires public and private sector solutions.

Meanwhile, Phung Dac Loc, General Secretary of the Viet Nam Insurers Association, noted that the number of people purchasing social insurance in Viet Nam exceeds 10 million, which supports 2.3 million retirees. He also warned of the risk of insurance fund collapses in 2032. — VNS