Retirement could be a long way off for aging Vietnamese workers

A new proposal to lift the retirement age in Vietnam is expected to be put in front of lawmakers for consideration next year, said a senior labor official.

Government statistics show that Vietnam is ageing faster than expected. People aged 60 or older currently represent about 10.5% of the country’s population of over 90 million.

The Labor Ministry in 2014 tried and failed to call for the state retirement age to be lifted to 62 for men and 57 for women.

Nguyen Huu Dung, who was an expert in the labor field, retired from the top position at the Institute of Labor Science and Social Affairs. Since then he has been working as an adviser to the Labor Minister as a highly regarded freelance consultant.

Most Vietnamese people aged from 60-69 are healthy enough to work longer than they actually do, said Dung.

Vietnam’s working-age population is expected to shrink so quickly within the next decade, that one in six people will be over 60 years old, the government has warned.

Economists say if Vietnam wants to alleviate its shrinking workforce, it needs more people who can work past 60 and even into their 70s. It is estimated that in the next 50 years, Vietnam will have 10 million more people aged 60 or older.

“We need to lift the retirement age. However, we should let senior workers decide for themselves,” said Dung, who also raised the question about how to take advantage of older workers without harming young employees.

Demographic transition, which is characterized by a shrinking workforce and aging population, is taking place in Vietnam, putting more pressure on the state’s social security funds, said Deputy Labor Minister Pham Minh Huan.

“We should take this into serious consideration as it might hurt employment opportunities for young people,” Huan added.

Vietnam’s golden population was forecast to last about 30 years from 2010 to 2040, but due to a lower birthrate and longer life expectancy, Vietnam is aging rapidly and the working-age population is shrinking.

Aware of the population drift, the government is making efforts to turn its aging population into an advantage.

According to the UNDP, if Vietnam fails to create jobs, develop social security and improve quality of life before the working age population peaks, it will risk instability in the future, including a lack of workers and an increased need for health care for the elderly.

In the near term, UNDP suggests Vietnam should boost productivity by raising the mandatory retirement age, which means there will be more working seniors in the future.

Countries in Asia and the Pacific are home to more than half of the population aged 60 or older in the world, numbering up to 533 million people, said Lubna Baqi, the deputy director for the Asia and the Pacific Regional Office of the United Nations Population Fund.

The number of older people in the region is expected to jump to nearly 2.5 billion by 2050, representing two thirds of the world’s population aged over 60. Asia's population is aging faster than anywhere in the world, said a study, warning the swelling ranks of the elderly will cost the region US$20 trillion in healthcare by 2030.