Workers prefer earlier retirement over earlier pension eligibility

Nguyen Minh Ga, 52, plans to quit her job at the end of the year after slogging away for 15 years, unable to handle her current workload.

Ga and her husband are long-time employees of the Nidec Vietnam, a subsidiary of Japanese electric motors maker Nidec Sankyo in Thu Duc. Due to a recent shift switch, they have to work the graveyard shift from 7 p.m. to 4:30 a.m. the next day; then do overtime until 7 a.m. That means 12 hours a day for VND25 million ($1,077) a month for both husband and wife.

Ga said she’s been slogging away like this for the past 15 years, with overtime work being the only way she could earn more money. She and her husband had left Ca Mau in the Mekong Delta for HCMC about 20 years ago, and after working for several companies, they decided to settle at Nidec Vietnam for one reason: it frequently allows overtime.

"When I was young, I had the strength to work and raise my children. Now I’m old and so are my limbs and eyes. I can’t keep up," she said, adding that she has switched to a different sector to ensure that the assembly chain’s efficiency remains unaffected.

But her new job requires her to stand the entire day. After about a year, her legs are frequently swollen and show signs of developing varicose veins, preventing her from working for long periods.

In accordance with current regulations, Ga should retire in another five years and her husband in another 10. "That is way too long," Ga said.

Ga’s decision might seem surprising in the context of Labor Minister Dao Ngoc Dung suggesting Sunday that the number of years workers have to pay social insurance premiums to be eligible for pension be reduced to 15 years from the current 20.

However, she explained that for someone who cannot work like they used to, the reduction "doesn't have much meaning" as they would still have to wait until retirement age to earn their pension.

So Ga and her husband have decided to opt for a one-time withdrawal of their retirement money. With over VND200 million ($8,620), they plan to return to Ca Mau to build a home and raise shrimp for a living.

The couple's decision isn’t uncommon among workers of Nidec Vietnam.

Luu Kim Hong, head of the company’s labor union, said that workers feel "worried and uncertain" over the proposal for reducing the number of years they have to social insurance premiums to 15 years or even 10.

A worker in the manufacturing sector typically does the job best until age 40-45. At Nidec, old workers can do simple jobs that are more appropriate for their health, while those with the skills can become managers. But many choose to leave simply because they cannot handle the workload and working hours.

"If a worker cannot find another job, she/he would have to wait 15-20 years to get their retirement money. This is their biggest concern," Hong said.

Nguyen Thanh Do, head of the legal policy department of the HCMC Federation of Labor, said the working age and retirement age of different worker groups could have a difference of 10-20 years, especially in the manufacturing sector.

A survey on the lives and work of female textile workers found that the average age of the group was just 34.4 years. Around 74 percent of them are aged 23-42, while only 18 percent of them are aged 43 and above. Over 60 percent of the 1,300 surveyed workers said they would withdraw their retirement money because they cannot afford to pay more, are worried about new policy changes, or simply want more money to help their family.

Do said reducing the number of years that workers have to pay their social insurance would make them feel that they would need to wait a long time before they can get their retirement money.

Dang Tan Dat, deputy head of the legal policy department at the Binh Duong Federation of Labor, said manufacturing sector workers over the age of 40 will find it difficult to get a new job if they become unemployed. It means they would have little chance to continue their contributions to the social insurance fund. Even if they’ve already paid all their required years, unemployed workers would still have to wait until their retirement age to receive their pension.

Therefore, many workers are deciding to quit in advance so they qualify for one-time withdrawals.

"To make pension more accessible to workers, a lowered number of years shouldn’t be the only adjustment. There should also be other support policies," Dat said.

There must be ways to provide social insurance support for those who cannot return to the job market or can only work odd jobs. They could either be provided with money based on the interest rates of banks or insurance funds, or simply be provided free medical insurance cards, he added.

Dat said there are cases where workers should be able to collect their retirement money early; for example those who’ve paid the premiums for the required years but have yet to reach their retirement age.

Hong said the government should have programs to help workers switch jobs and/or introduce them to new jobs, and there should be incentives for businesses to hire workers aged 40 and above.