Giang, Thanh Long (2004): The Pension Scheme in Vietnam: Current Status and Challenges in an Aging Society. Published in: Vietnam Development Forum , Vol. Discus, (April 2004)
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The publicly-managed Pay-As-You-Go (PAYG) defined-benefit pension scheme in Vietnam is described, with an analysis of its financial sustainability in the context of an aging society in a dynamically efficient economy. By using actuarial models developed by the International Labor Organization (ILO), the paper finds that the implicit pension debt (IPD) of the scheme is high in comparison with GDP of the year 2000, which is the base year for projections. Regarding the social aspect, a high IPD implies that the burden of maintaining this scheme is borne by the current and future participants. For this reason, the pension scheme in Vietnam will cause not only financial instability but also inter-generational inequity. In order to avoid this situation, the current scheme needs to be reformed. In particular, Vietnam should move to a partially-funded defined-contribution scheme with careful considerations of social and economic impacts so as to avoid both financial instability and inter-generational inequity.
|Item Type:||MPRA Paper|
|Institution:||Vietnam Development Forum (VDF)|
|Original Title:||The Pension Scheme in Vietnam: Current Status and Challenges in an Aging Society|
|Keywords:||aging population; pension scheme; pension debt; financial sustainability; Vietnam|
|Subjects:||H - Public Economics > H5 - National Government Expenditures and Related Policies > H55 - Social Security and Public Pensions|
|Depositing User:||Thanh Long Giang|
|Date Deposited:||30. Nov 2006|
|Last Modified:||11. Feb 2013 23:11|
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