Regardless of retirement age, seniors not ready to call it a day in Vietnam

By Ngan Anh   January 18, 2018 | 08:57 am GMT+7
Regardless of retirement age, seniors not ready to call it a day in Vietnam
Roughly seven in 10 of the working seniors in Vietnam’s urban areas work in the informal sector. Photo by Reuters

While policymakers debate raising the retirement age, many seniors are spending their golden years earning money anyway.

Six days a week, come rain or shine, 65-year-old Cao Duy Tan gets up at 6 a.m. to go to a private medical school in Hanoi where he works as a teacher.

He has been working for around nine hours a day at the Tue Tinh School of Medicine since he “retired” five years ago.

Due to his love for the job and desire to stay active, Tan is among a growing number of seniors in Vietnam who are continuing to work beyond the official retirement age of 60.

According to Financial Times Confidential Research, some 65 percent of Vietnamese people aged 50 or over are still working. The ratio is the second highest in Southeast Asia, after Indonesia.

Tan said he has contributed enough to the country’s national pension fund to get more than VND7 million ($307.3) per month now, which is enough for him and his wife to live on. The job, for him, is not a burden, but rather a source of pride which gives him energy.

The attitude is common among many Vietnamese seniors who grew up in the austerity of the post-war years, before a devastated country was transformed into a middle income one following socialist oriented market economy reforms in the late 1980s.

“Money is secondary,” he said. “The most important thing is to do something useful for society.”

Tan said his body has become slowing over the past two years, but he would really like to carry on working for four or five more. “If I stopped work, I would feel old.”

For other working retirees, money is still the main factor that keeps them in the workforce, as their pension payments fall short of living costs.

The monthly pension for retirees in Vietnam stands at VND4 million per month, said Do Ngoc Tho, vice head of the policy department at Vietnam Social Insurance.

In addition to his meager pension, a monthly wage of more than VND3 million from working as a guard for a company on Dich Vong Hau Street in Hanoi means Dang Van Quan's life is more comfortable, but the job is quite hard for the 70-year-old retiree.

“The job is not easy because I often have to arrange heavy motorbikes in a packed parking lot,” he said. “Sometimes I think about quitting, but if I didn’t work, I wouldn't have enough money to live.”

In Vietnam, people working in the public sector or for corporations are entitled to pension payments after they retire under social insurance schemes. But they account for only 29 percent of seniors and are among those who are better off, according to the United Nations (UN).

Around 40 percent of those aged from 70 to 74 are still employed in some way, UN data showed.

However, not all seniors who want to work can find a job. Many employers do not want to recruit old laborers due to concerns about low productivity.

Many seniors who want to work full-time are forced to take temporary jobs or work as independent contractors. Rather than retire, older workers sometimes choose to become self-employed.

Roughly seven in 10 of the working seniors in Vietnam’s urban areas work in the informal sector, such as market vendors, taxi drivers, waste and scrap collectors and street vendors, according to the UN.

Lifting retirement age

Experts say people working longer and later in life are becoming increasingly necessary in Vietnam, where a shrinking number of young taxpayers find themselves supporting a population of elderly that is both growing and living longer.

If the current retirement age remains unchanged, the country’s social insurance fund may fall short by 2020 and would be exhausted by 2037, the Vietnam Social Insurance predicted.

Vietnam reached a turning point in 2015 when it started to become one of the countries with the fastest aging populations in the world, according to a recent report by the labor ministry.

The number of Vietnamese who are over 65 will rise from 6.3 million now to 18 million by 2040, accounting for more than 18 percent of the population and transforming Vietnam from a young society into an old one, a labor ministry report quoted the United Nations as saying.

Life expectancy at birth in Vietnam is 76, and Vietnamese people live longer than almost all their peers in Southeast Asia, ranking third for life expectancy at birth.

The retirement age in Vietnam, currently 60 for men and 55 for women, may be gradually raised to 62 and 60 respectively, the labor ministry has said in a new proposal.

The labor ministry suggested a step-by-step approach by adding six months to the current retirement age every year starting from 2021.

Nguyen Huu Dung retired at the age of 64, four years later than the retirement baseline, from a top position at the Institute of Labor, Science and Social Affairs. Since then he has been working as an adviser to the Labor Minister and is a highly regarded freelance consultant.

He said most Vietnamese people aged from 60-69 are healthy enough to work for longer than they actually do.

Economists say if Vietnam wants to alleviate its shrinking workforce, it needs more people who can work past 60 and even into their 70s.

 “With or without the proposed change to the retirement age, I will continue working,” Tan said. “I have been working for over 40 years. The day I stop, that will be the end of me.”

 
 
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