Proposal to expand the set of banks eligible to receive Social Insurance Fund deposits

The government proposes allowing banks with at least 50% state-owned capital to receive deposits from the Social Insurance Fund (BHXH), a move that has drawn warnings from experts and labor representatives over potential risks to workers’ welfare.

On April 7, the Vietnam General Confederation of Labor held a social feedback conference on the draft law amending and supplementing certain provisions of the 2024 Social Insurance Law.

Proposed change to where BHXH deposits can be held

Mr. Nguyen Duy Cuong, Deputy Head of the Wage and Social Insurance Department (Ministry of Home Affairs), said the draft law would expand the investment categories for the BHXH Fund. Under the proposal, in addition to state-controlled commercial banks currently covered by regulation, BHXH funds could also be deposited in banks with more than 50% state-owned capital.

At present, BHXH funds are deposited only in state-owned commercial banks, including Agribank, VietinBank, VietcomBank, and BIDV.

Concerns raised by experts and union representatives

GS Le Minh Thong, former deputy head of the Legal Committee of the National Assembly, said the regulation could create risks. He argued that investing the BHXH Fund is a major issue because the fund is tied to social welfare for tens of millions of workers, and he suggested removing the proposal from the draft law if there is no impact assessment or practical basis.

Dr. Nguyen Dieu Hong, an independent expert, also said expanding the pool of banks eligible to receive BHXH deposits is too risky, particularly for banks with 50% or more state-owned capital. She emphasized that the fund represents workers’ savings that may need to be paid out over decades, and urged reconsideration to better protect welfare.

Mr. Nguyen Xuan Tuan, head of the Legal Policy Department of the Thanh Hoa Provincial Federation of Labor, similarly recommended removing the content from the draft law.

Support and risk trade-off view

In contrast, Mr. Vu Anh Tuan, Vice President of the Vietnam Medical Union, said that to earn yields the fund must invest, which inherently involves risk. He assessed that the 50% ownership threshold is a reliable level and said consideration could be given to allowing BHXH deposits in state-owned banks and banks with 50% or more state-owned capital.

Fund scale and outlook

According to the Ministry of Finance, by the end of 2024 the BHXH Fund had about 1.29 quadrillion dong in reserves, growing at an average of about 9% per year.

By 2027, it is expected to have:

• 24.6 million participants in BHXH
• 18.8 million contributors to unemployment insurance
• 99.3 million participants in health insurance

The Ministry of Finance also noted that pensioners, BHXH benefits, and unemployment benefits are expected to rise as coverage expands.

Next steps

The draft Law on amending and supplementing a number of provisions of the 2024 Social Insurance Law is expected to be presented to the National Assembly for consideration at the second session of the 16th National Assembly.