1. Policy Change Context
1.1. Current status of the social security system and the need for supplementary pension funds development
The social security system in Vietnam is undergoing a profound structural transformation driven by demographic shifts. The labor force and population structure are rapidly advancing into an aging phase, posing an urgent requirement to establish long term financial reserve mechanisms to secure income for employees upon concluding their working cycles. Over the years, the mandatory social insurance system operated by the State has played a predominant role in paying retirement pensions. However, faced with inflationary pressures, escalating healthcare costs, and the desire for higher living standards among the elderly, the income generated from mandatory social insurance needs to be supplemented by alternative financial instruments.
Recognizing the necessity to diversify retirement income sources, the Government previously issued Decree 88/2016/ND/CP, which established the initial legal framework for the voluntary supplementary pension insurance program. This program operates on the principle of voluntary contributions from both employers and employees, creating individual pension accounts entrusted to financial institutions for management. Nevertheless, after more than a decade of practical implementation, the scale of the supplementary pension fund system has not achieved the coverage level expected by policymakers. By the end of 2025, the entire market recorded only four enterprises granted certificates of eligibility by the Ministry of Finance to provide voluntary supplementary pension fund management services, namely Dragon Capital Vietnam, MB Capital, Vietcombank Fund Management, and SSI Asset Management. These four entities collectively managed seven funds with a total net asset value reaching 2,210 billion VND, attracting the participation of 28,538 employees. Although the total assets demonstrated a twenty six fold increase compared to 2021 and a 53% t rise compared to the end of 2024, this figure remains exceptionally modest relative to the national workforce size and the financial potential of the corporate sector.
1.2. Limitations of the traditional investment model under old regulations
The fundamental cause leading to the sluggish development of the supplementary pension fund system in the previous period stemmed from overly stringent risk management regulations applied to investment portfolios. Under the framework of Decree 88/2016/ND/CP, to ensure maximum safety for social security capital, pension funds were compelled to allocate an overwhelmingly large proportion to fixed income instruments issued by the State. The prevailing regulation at that time mandated that the investment value in Government bonds must represent a minimum of 50% of the total fund assets. The consequence of this requirement was clearly reflected in the asset structure of the entire system at the end of 2025, where 49.69% of assets were invested in Government bonds, 26.61% were receivables from interest and dividends, 15.18% were allocated to securities investment fund certificates, and 8.01% were held in cash and cash equivalents.
Concentrating the portfolio on the lowest risk asset class inherently meant that pension funds had to accept a very limited nominal return rate. During economic phases characterized by fluctuating real inflation rates, the profits derived from Government bonds were insufficient to generate the asset surplus necessary to protect the purchasing power of the contributed cash flows in the long term. The absence of asset types with high capitalization growth potential, such as equities of listed companies, diminished the attractiveness of the supplementary pension program. Confronted with the challenge of optimizing yields to attract more participants, state regulatory agencies recognized the imperative need to comprehensively revise the legal framework, thereby enabling pension funds to access a more diverse array of financial instruments.
1.3. The introduction of the 2024 Social Insurance Law and Decree 85/2026/ND/CP
The institutional reform process was significantly propelled through the National Assembly’s passage of the 2024 Law on Social Insurance. This legislation dedicated an entire chapter to regulating supplementary pension insurance, officially solidifying the firm legal standing of this insurance type within the multi tiered social security structure in accordance with the orientation set forth in Resolution 28 of the Party Central Committee. In order to concretize Clause 3, Article 127 of the 2024 Law on Social Insurance and establish a modern legal corridor, the Government promulgated Decree 85/2026/ND/CP on March 25, 2026.
Decree 85/2026/ND/CP, officially taking effect on May 10, 2026, serves to entirely replace the former Decree 88/2016/ND/CP. This legal document not only recalibrates technical standards concerning the operations of fund management enterprises but also marks a groundbreaking shift in the philosophy of managing social security assets. For the first time, supplementary pension funds are permitted to expand their investment portfolios directly into listed securities on the centralized stock market. This alteration comprehensively resolves the imbalance between capital preservation and profitability goals while establishing the legal foundation to form a professional institutional investor base of significant scale, contributing long term capital to the development of Vietnam’s capital market.
2. Content of the New Regulations
2.1. Expanding the investment portfolio into listed securities
The central and most profoundly impactful modification in Decree 85/2026/ND/CP is the authorization for supplementary pension funds to include listed securities in their legitimate investment asset portfolios. Accordingly, alongside traditional financial instruments such as Government bonds and investment fund certificates, fund management enterprises are now empowered to directly trade shares of companies currently listed on the stock exchanges. This new orientation originates from long term financial analysis practices demonstrating that listed securities constitute a highly liquid asset class, represent the diverse development of economic sectors, and possess the capability to deliver superior returns compared to fixed income channels when held over cycles spanning ten years or more.
The authorization to invest in listed securities does not imply an uncontrolled open door policy but is accompanied by stringent quantitative risk governance principles. State management authorities require that capital disbursement into equities must strictly adhere to rules regarding capital safety, maximum proportion limits for each asset group, and risk dispersion criteria. Fund management enterprises bear the responsibility of formulating and promulgating internal criteria sets to screen and select specific investment assets, based on the approved investment objectives outlined in the fund’s charter. Financial indicators, business operation quality, transparency in corporate governance, the liquidity level of the stock on the market, and historical price volatility margins are mandatory factors that must be evaluated in detail before the fund’s executive board makes capital allocation decisions.
2.2. Adjusting the safe investment proportion and establishing risk control limits
Concurrently with expanding the portfolio into risk assets, Decree 85/2026/ND/CP provides a more flexible mechanism for managing the proportion of safe assets. Specifically, for pension funds possessing a total net asset value of 5 billion VND more, the new regulation permits reducing the minimum mandatory investment proportion in Government bonds to 40% of the fund’s total net asset value, contrasting with the 50% threshold required in the previous phase. This 10% reduction in the mandatory proportion liberates a substantial volume of capital, granting proactive authority to fund managers in pursuing higher yield investment opportunities within the listed stock market or the high quality corporate bond market.
To prevent the phenomenon of excessive risk concentration in a limited number of issuing organizations, which could lead to localized insolvency risks, the Decree supplements a system of specific investment limits. Fund management enterprises are restricted by maximum percentage ratios permitted for investment in securities issued by the same organization. Compliance with these ratios aims to ensure that the value depreciation of a single security code will not exert a material impact on the total net asset value of the entire pension fund. The categorization of investment portfolios according to varying levels of risk appetite is also encouraged. Pension programs are structured into multiple distinct options, enabling younger employees to participate in portfolios with a high proportion of listed securities to accelerate accumulation, while older employees may select portfolios prioritizing debt instruments to preserve value.
2.3. Regulations on operating conditions for pension fund management enterprises
Managing supplementary pension funds is a highly specialized conditional financial service business that directly affects the future financial security of employees. Therefore, Decree 85/2026/ND/CP comprehensively upgraded the standards concerning financial capacity, executive experience, and personnel structure for organizations intending to participate in providing this service. To be granted a Certificate of Eligibility for Business, a fund management company must simultaneously satisfy a system of exceptionally rigorous quantitative criteria.
First, regarding overall management capacity, the company must be managing a minimum total asset value reaching one trillion VND at the time of submitting the application profile. Second, regarding operational experience, the enterprise must possess a minimum of five continuous years of active operation in the field of securities investment fund management and must currently be directly managing at least two public funds, among which there must mandatorily be at least one bond investment fund. The bond fund requirement serves to validate the enterprise’s proficiency in managing safe asset portfolios and regulating stable cash flows. Third, regarding professional human resource quality, the enterprise must maintain a core staff team comprising at least five individuals with more than five years of working experience in finance, banking, or investment management sectors. Among these five key personnel, it is strictly required that at least three individuals possess fund management practice certificates issued by competent state authorities or equivalent international financial analysis certifications. These technical barriers are established with the objective of eliminating incompetent organizations, guaranteeing that only genuinely professional and transparent financial institutions are authorized to manage the social security capital of the society.
2.4. Participants and the principle of voluntariness in contribution agreements
Decree 85/2026/ND/CP stipulates in detail and encompasses all target groups entitled to participate in the supplementary pension insurance system. Pursuant to Article 4 of the Decree, participating entities include employers and employees who have already participated in the mandatory social insurance system in accordance with Article 2 of the 2024 Law on Social Insurance. The workforce eligible for participation is listed quite diversely, encompassing individuals working under labor contracts with a term of one full month or more, including scenarios where the two parties reach an agreement utilizing different terminologies, provided the document reflects elements indicative of remuneration, wage payment, and the managerial control of one party over the other. Additionally, officials, civil servants, and public employees working in state agencies; defense and public security workers and public employees; officers, professional military personnel, and professional and technical non commissioned officers within the army and people’s public security forces; individuals engaged in cipher work; non commissioned officers, soldiers, and conscripts; standing militia members; Vietnamese workers employed abroad under contracts; spouses who do not receive salaries from the state budget but are dispatched on official missions alongside members of diplomatic representative agencies; enterprise managers, controllers, and representatives of state capital portions in enterprises receiving salaries; part time active personnel at the commune, village, and residential group levels, as well as individuals working on a part time basis with negotiated wages are all categorized under the groups permitted to join the fund.
The fundamental principle governing the participation process is voluntariness and equitable agreement. Engagement in supplementary pension insurance is executed entirely on a voluntary basis, facilitated through employers and the programs provided by pension fund management enterprises. Employers carry the responsibility of formulating detailed participation schemes, organizing meetings to gather feedback from the collective of employees or the grassroots trade union representatives. Upon achieving consensus, the two parties will proceed to sign a written agreement that clearly defines the contribution levels, payment methods, and related conditions. The law strictly prohibits any coercive actions on the part of the employer. The Decree explicitly emphasizes that participation in supplementary pension insurance must absolutely not be deemed a mandatory condition during personnel recruitment, the signing of initial labor contracts, or the extension of labor contracts. Simultaneously, employers are not permitted to execute discriminatory acts, restrict legal rights, or utilize the agreement to participate in the fund as a criterion for evaluating emulation, determining reward policies, or allocating general corporate welfare to employees.
2.5. Organization of individual pension account management and operational supervision mechanisms
Following the signing of the written agreement between the enterprise and the employee, the employer will initiate procedures to register the supplementary pension insurance program with the fund management enterprise. The pension fund operates based on an individualized account mechanism. The fund management enterprise is obligated to open separate individual pension accounts for each employee participating in the program. The capital structure within each individual pension account consists of the monetary contribution made by the employer on behalf of the employee, provided there is a support agreement from the company, and the monetary portion deducted by the employee from their personal income to be entrusted to the investment fund.
To guarantee transparency and maximize the protection of participants’ assets, Decree 85/2026/ND/CP establishes a multi tiered supervision system involving the participation of multiple independent financial organizations. This operational structure comprises the pension fund management enterprise, a supervisory bank, an asset depository institution, and an organization providing individual pension account administration services. The supervisory bank holds the responsibility for verifying the validity of all investment transactions executed by the fund management enterprise, ensuring strict compliance with the investment limits allocated to listed securities in accordance with legal provisions and the fund’s charter. The depository institution executes the function of asset safekeeping, completely segregating the fund’s assets from the proprietary assets of the fund management company. On the part of the employees, they are granted information administration rights, enabling them to access the system to monitor daily account balance fluctuations, request fund conversions, or perform account preservation when undergoing changes in their workplace. This segregation of functions eliminates the risk of capital misappropriation and ensures that all information regarding contributions and payouts is accurately and continuously updated.
2.6. Regulations on payouts, early withdrawals, and the fee mechanism
The principle of disbursing benefits from the supplementary pension fund is executed entirely based on market mechanisms, directly grounded on the total balance of the individual pension account at the exact moment the employee requests to receive the payout. The State does not implement any guarantee or commit to any fixed payout level for this voluntary insurance type; the entirety of the profitability depends on the fund’s investment capacity and the fluctuations of the financial market. Upon satisfying the retirement age requirements, employees possess the flexibility to choose a payout method that includes receiving periodic monthly payments, taking a single lump sum of the entire balance, or combining both formats to optimize their personal financial plans.
Aiming to protect the rights of employees under force majeure circumstances, Decree 85/2026/ND/CP elaborates on five specific scenarios where participants hold the right to request the early withdrawal of the entire value of their individual pension accounts before reaching retirement age without incurring any sanctions. First is the scenario where the participating employee unfortunately passes away. Second is when the employee receives a diagnosis from a competent medical facility stating they are suffering from one of the severe critical illnesses, such as cancer, polio, decompensated liver cirrhosis, severe tuberculosis, or HIV infection progressing to the AIDS stage. Third is if the employee suffers a reduction in working capacity at a rate of 81% or higher. Fourth is when the employee is certified as an individual with exceptionally severe disabilities pursuant to legal regulations concerning persons with disabilities. Fifth applies to laborers who are foreign citizens working in Vietnam, under circumstances where they no longer reside in Vietnam or when various work permits, practice certificates, or professional licenses expire without being extended by functional authorities.
For scenarios where employees request early monetary withdrawals before reaching retirement age but do not fall within the five objective and force majeure situations mentioned above, the fund management enterprise possesses the authority to apply a technical measure intended to limit disruptions to investment cash flows. Specifically, the pension fund is permitted to collect an unexpected payout fee subject to a maximum cap equivalent to five percent of the total monetary value received by the employee. This fee does not convert into profit for the fund management enterprise; instead, it must be aggregated into the total asset value of the fund, serving the purpose of augmenting the collateral asset value and compensating for liquidity damages in order to secure payouts for the remaining participants who maintain their accounts to the very end. This regulation creates a rational balance, simultaneously addressing the urgent financial needs of participants while fostering a sense of discipline in sustaining long term savings objectives for old age.
Regarding the monetary portion contributed by the employer into the employee’s individual account, the enterprise retains the right to establish conditions concerning the minimum working duration required for the employee to become entitled to enjoy this specific monetary portion along with the investment outcomes derived from it. The Decree explicitly states that the minimum working period under this agreement is not permitted to exceed five years. In the event that the employee terminates the labor contract prior to fulfilling this committed duration, the employer will be reimbursed by the fund for the entirety of the company’s contributed portion plus the investment profit generated from that sum, after deducting the associated management expenses.
2.7. Corporate income tax and personal income tax incentives applicable from 2026
The supplementary pension insurance policy is intricately integrated with the tax legal system to generate robust financial incentives for practical implementation. From the perspective of employing enterprises, the entire monetary sum genuinely disbursed by the enterprise to contribute to the supplementary pension fund for employees, adhering to the agreed upon contribution levels, is officially recognized by tax administration authorities as a deductible expense when determining income subject to corporate income tax. This mechanism allows enterprises to optimize their tax obligations, transforming personnel welfare expenses into a legitimate financial deduction tool, thereby encouraging organizations to allocate budgets to care for the retirement lives of their personnel teams.
From the employees’ perspective, personal income tax deduction policies applicable to pension contributions are synchronized with the amendments in the Law on Personal Income Tax No. 109/2025/QH15, which comes into enforcement on January 1, 2026. Based on this new statute, family circumstance deduction levels have been significantly increased to align with socio economic conditions. Specifically, the deduction level for the taxpayers themselves is elevated to 15.5 million VND per month, equivalent to 186 million VND annually, and the deduction level for each dependent is adjusted to 6.2 million VND per month. During the process of calculating personal income tax obligations based on the new partial progressive tax schedule comprising five brackets, the monetary amount that employees contribute monthly to the supplementary pension fund continues to be directly deducted from their taxable income prior to computing the payable tax amount. Furthermore, during the payout phase, the draft Decree guiding the current Law on Personal Income Tax has categorized the monthly pension amounts paid by the supplementary pension insurance fund into the list of incomes fully exempted from personal income tax. This continuous preferential treatment stretching from the input cash flow accumulation phase to the output withdrawal phase creates a perfect circle of financial protection, ensuring participants fully enjoy the fruits of their labor and their investment profits.
3. Significance to the Market
3.1. Consolidating the institutional investor base and providing long-term capital
The policy transition authorizing pension funds to participate in the listed stock market generates a critically important structural catalyst for Vietnam’s capital market. The developmental history of the domestic stock market illustrates the dominance of retail investors, resulting in a trading nature heavily influenced by short term emotional volatility. Supplementary pension funds represent a formidable force of professional institutional investors, commanding massive asset volumes and operating on investment cycles spanning decades.
Pension capital is a class of funds relatively immune to pressures demanding emergency divestment to satisfy short term liquidity needs. The persistent presence of this capital source assists in consolidating the investor base, diversifying the structure of market participants, and establishing an essential counterweight to balance out speculative capital flows. When the accumulated funds from millions of employees and thousands of enterprises are converged and systematically disbursed through pension funds, it generates an abundant long term capital stream, directly supporting the share issuance needs for mobilizing capital to serve production and business activities in the corporate sector, thereby elevating the substantive role of the capital market in promoting macroeconomic growth.
3.2. Improving the liquidity and stability of the stock market
A sustainable stock market perpetually requires a stable liquidity buffer to withstand external shocks. The cash flow contributed to the supplementary pension fund possesses a periodic nature, repeating monthly regardless of the prevailing phase of the economic cycle. This continuously generated volume of cash compels fund management companies to frequently seek assets for disbursement, supplying a persistent and highly predictable source of demand for purchasing securities.
During periods when the market confronts deep price correction waves induced by global systemic risks or panicked psychological factors, pension funds typically execute portfolio rebalancing strategies. Instead of participating in panic selling aligned with herd mentality, they exhibit a tendency to capitalize on price plunges to purchase high quality stocks at deeply discounted valuations, effectively performing the function of natural liquidity providers. This contrarian purchasing process operates as a shock absorption mechanism, helping to restrain the free fall momentum of stock indices, enhancing the overall stability of the market, and averting the risk of a widespread crisis of confidence.
3.3. Urging listed companies to upgrade corporate governance standards
The spillover impact of pension funds on the market does not merely halt at the scale of cash flows but also vividly manifests through the reshaping of operational standards within the corporate sector. Pension funds execute responsible investment strategies, placing safety and sustainable development criteria at the forefront. Their investment asset appraisal processes demand an exceedingly rigorous level of financial information transparency.
In order to attract the abundant capital streams from pension funds, listed issuing organizations are compelled to proactively undertake reforms in corporate governance structures, elevate the operational capacity of supervisory boards, disclose information truthfully, and respect the rights of minority shareholders. Enterprises possessing transparent business profiles, professional governance, and an orientation towards sustainable development will be prioritized by pension funds for substantial proportional allocations, thereby elevating their stock capitalization values. Conversely, companies maintaining poor governance standards will be purged by the institutional investor system and eliminated from investment portfolios. Through the power of shareholder voting rights and capital allocation scale, pension funds become an essential driving force compelling the entire stock market to advance toward international standards.
4. Benefits for Pension Funds and Participants
4.1. Portfolio diversification and investment risk dispersion
From the perspective of financial engineering, Decree 85/2026/ND/CP provides a flawless instrument for fund management enterprises to execute portfolio optimization strategies. Fundamental risk management principles assert that concentrating all assets into a single class of financial instruments, even Government bonds with the highest safety rating, still harbors inflation risks and opportunity cost risks. By combining listed securities with traditional bond classes, pension funds possess the capability to construct portfolios comprising asset classes that exhibit low volatility correlation coefficients or inverse correlations with one another.
When the equity market endures recessionary periods, the fixed interest cash flow from bonds will serve the role of protecting the capital structure. Conversely, during eras of robust economic expansion, breakthrough profits derived from rising stock prices will propel the overall performance of the entire portfolio to elevated levels. This capacity to design diversified portfolios allows pension funds to minimize the volatility magnitude of the total net asset value, thoroughly disperse the unsystematic risks associated with individual industries and specific enterprises, and simultaneously create a more stabilized capital growth curve over the long term investment cycle.
4.2. Increasing profitability potential and protecting asset value against inflation
The ultimate objective of the supplementary pension insurance program is to deliver a solid financial foundation, sustaining the living standards for employees during their old age. To achieve this objective, accumulated assets must not only be preserved but must also augment in value at a pace faster than the currency depreciation rate. Listed securities represent ownership rights over tangible production and service assets within the economy; therefore, they possess the capacity to adjust revenue and profit growth in tandem with inflation.
Allocating a segment of the portfolio into this asset group grants tens of thousands of employees the opportunity to directly enjoy the developmental achievements of industry leading enterprises. When the power of compound interest is applied over a time horizon ranging from twenty to thirty years, an annual yield differential of merely a few percent between a portfolio containing equities and a bond only portfolio will generate a colossal disparity in terms of the absolute value of the pension account balance at the time of final settlement. This constitutes the key element facilitating pension funds in successfully executing the function of asset augmentation, effectively supplementing the shortfall in the income replacement rate from the mandatory social insurance system.
4.3. Competitive advantage for enterprises in attracting and retaining personnel
Viewed through the lens of human resource management by employers, the supplementary pension insurance program is regarded as a strategic solution to address the dilemma of labor turnover. In a business environment where high quality human resources play a decisive role, short term cash based compensation regimes gradually lose their allure due to their easily replicable nature by competitors. Establishing a supplementary pension program demonstrates a humane vision and a commitment to long term companionship from the enterprise toward the lives of its employees.
The most potent instrument within this policy is the right to establish conditions regarding the minimum working duration required for the employee to receive the enterprise’s contributions, with the maximum limit prescribed by law being five years. Employees confronting job transition decisions will be forced to meticulously weigh the opportunity costs associated with forfeiting a massive financial accumulation that includes the principal and accumulated interest from the company’s contribution portion. This interest alignment mechanism generates loyalty from the employees, assisting the enterprise in retaining its core personnel team, minimizing recruitment and replacement training costs, and concurrently fully leveraging the corporate income tax deduction incentives provided by the State.
5. Risks and Implementation Notes
5.1. Price volatility and liquidity risks in the stock market
Although offering superior profitability potential, opening the investment portfolio doors to listed securities intrinsically implies that supplementary pension funds must accept facing the specific risks inherent to the capital market. Systemic risks, encompassing macroeconomic recessions, abrupt monetary policy adjustments, or geopolitical shocks, can trigger widespread value depreciation phenomena across the majority of listed stocks. Pension funds may register declines in their net asset value in the short term.
This situation becomes particularly sensitive for the cohort of participants approaching retirement age, as they prepare to execute full cash withdrawals from the fund. A decline in account value at the exact moment of final settlement will inflict irreversible financial damages, as they no longer possess sufficient time to await the market’s cyclical recovery. Beyond price volatility risks, liquidity risk constitutes another factor demanding calculation. During strained trading sessions, the necessity for a pension fund to liquidate a massive volume of shares to satisfy surging withdrawal orders may encounter difficulties due to a shortage of reciprocal demand, forcing the fund’s management board to sell assets at deeply discounted prices, thereby causing direct losses to the overall investment efficiency.
5.2. Compliance responsibilities and operational capacity of fund management enterprises
The operational quality of the fund management enterprise acts as the determining factor for the success or failure of this portfolio expansion policy. Upon being granted the authority to trade listed securities, the disparities in professional capacity among financial organizations will be vividly exposed through the actual yield rates delivered to employees. Professional ethics risks and executive governance risks are ever present if internal control systems are not rigidly organized. Making erroneous investment decisions into stocks of enterprises lacking solid fundamentals, possessing weak financial health, or manipulating audited reports can evaporate a portion of social security assets.
In order to prevent these risks, alongside cross supervision from the supervisory bank, the Ministry of Finance executes state inspection functions through periodic examinations occurring every two years or unscheduled inspections upon detecting suspicious transactions. The penalty framework addressing violations of professional ethics, exceeding investment limits in an issuing organization, or breaching asset segregation principles is designed to possess an exceptionally severe deterrent nature. Fund management enterprises that have their Certificates of Eligibility for Business revoked by regulatory agencies will face a penalty barring them from submitting reapplications for a duration of three years. In instances involving less severe violations, the organization may be subjected to measures suspending the establishment of new supplementary pension funds for a period of two years, inflicting critical damage upon brand reputation and business market share.
5.3. Strategic recommendations for employers
The process of adopting the supplementary pension insurance program demands meticulous preparation from the leadership boards of employing enterprises. The most crucial strategic decision involves the selection of a companion fund management organization. Enterprises should establish a professional evaluation council to comprehensively review the capacity profiles of fund management companies operating in the market, basing assessments on the total value of assets currently under management, the historical yield performance of public funds in the past, the structure of service management fees, and the transparent account information reporting systems.
Furthermore, internal communication efforts play an instrumental role in setting accurate expectations for employees. Human resources departments must organize seminars providing clear explanations concerning the nature of listed securities, emphasizing that this is an investment channel subject to net asset value fluctuations and that the State absolutely does not guarantee fixed interest rates. Enhancing financial literacy for participants assists them in comprehending the principles of long term accumulation, avoiding negative psychological reactions when the stock market encounters short term turbulence, and maximizing the limitation of requests for monetary withdrawals prior to retirement age to avert bearing the unexpected payout fee reaching up to five percent of the account value.
6. Conclusion
The Government’s promulgation of Decree 85/2026/ND/CP permitting the expansion of supplementary pension funds’ investment portfolios into listed securities marks a quantum leap in the philosophy of constructing social security institutions. This policy has dismantled the conservative boundaries of the previous era, cultivating favorable conditions for the long term accumulated capital of employees to harmonize with the growth of industry leading enterprises in the stock market. This decision not only yields the potential for outstanding return enhancements, protecting social security assets against inflationary pressures, but also establishes a robust institutional investor base, providing liquidity and propelling corporate governance standards for the entire Vietnamese capital market.
However, to optimize the benefits ushered in by the policy, synchronized coordination among participating entities remains the prerequisite factor. Fund management enterprises must ceaselessly elevate their financial analysis capabilities and ensure absolute compliance with quantitative risk governance disciplines. Employers must skillfully leverage the program to transform it into a sustainable personnel retention instrument. Under the rigorous and transparent supervision of state regulatory agencies, the voluntary supplementary pension insurance system, featuring its expanded investment portfolio, will excellently fulfill the role of the second pillar within the social security network, guaranteeing a prosperous and secure financial future for the Vietnamese labor force as they enter the era of population aging.
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