95 percent social insurance fund invested in Government bonds

SGGP
The social insurance fund’s remaining amount approximates VND500 trillion (US$22.03 billion), 95 percent of that has been invested by buying Government bonds with the average interest rate of 7.04 percent a year.

People receive pension and social insurance allowance (Photo: SGGP)

People receive pension and social insurance allowance (Photo: SGGP)

That was reported by Mr. Tran Dinh Lieu, deputy director general of the Vietnam Social Insurance Agency.
Mr. Lieu said that 5 percent of the fund has been used for loaning the state budget with the interest rate of 7.78 percent and deposited at commercial banks with the rate of 5 percent a year.
Last year the fund’s loaned amount reached VND34,400 billion ($1.52 billion).
According to the agency, depositing at commercial banks is difficult now with low interest rates. The law stipulates that the Vietnam Social Insurance Agency must deposit money at banks with good operation quality ranked by the State Bank of Vietnam (SBV).
However, SBV has just ranked healthy operation banks numbering five without good operation quality banks.
Interest rates have been low because banks have received deposits for less than six month terms. Some banks have got loans from the social insurance fund within 15 days.
The agency is working with the court and lawyers to reclaim overdue loans from Vietnam Bank for Agriculture and Rural Development and Financial Companies No.1 and 2. Their original debts alone total VND787 billion ($35 million).

By MANH HOA – Translated by Hai Mien

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