Decision No. 20/1998/QĐ-TTg On the Issuance of Financial Management Regulations for the Vietnam Social Security

DECISION OF THE PRIME MINISTER

ON THE ISSUANCE OF REGULATIONS ON THE MANAGEMENT OF FINANCIAL RESOURCES FOR THE SOCIAL INSURANCE OF VIETNAM

PRIME MINISTER

Pursuant to the Government Organization Law dated September 30, 1992;

Pursuant to Decree No. 19/CP dated February 16, 1995 of the Government on the establishment of the Social Insurance of Vietnam;

Considering the proposal of the Minister of Finance and the Board of Management of the Vietnam Social Security,

DECISION:

Article 1. The attached Decision promulgates the Financial Management Regulations for Vietnam Social Security.

Article 2. This Decision shall take effect from January 1, 1998. All previous regulations that conflict with this Decision are hereby abolished.

Article 3. The Ministry of Finance and the Social Insurance of Vietnam shall be responsible for guiding and supervising the implementation of these Regulations issued together with this Decision.

Article 4. The Minister, Heads of Ministries equivalent to Ministries, Heads of Government Agencies, Chairmen of People's Committees of provinces and centrally governed cities, Management Council of the Social Insurance of Vietnam, General Director of the Social Insurance of Vietnam shall be responsible for enforcing this Decision./.

REGULATIONS

FINANCIAL MANAGEMENT FOR VIETNAM SOCIAL SECURITY

(Issued together with Decision No. 20/1998/QĐ-TTg dated January 26, 1998 of the Prime Minister)

PART I
GENERAL PROVISIONS

Article 1. These Regulations apply to financial management activities concerning the entire system of the Social Insurance of Vietnam, including:

Social Insurance of Vietnam.

Social Insurances of provinces and centrally governed cities (hereinafter referred to collectively as Social Insurance of province).

Social Insurances of districts, counties, towns, and cities under provinces (hereinafter referred to collectively as Social Insurance of district).

Article 2. Monthly, the Ministry of Finance shall allocate sufficient funds to the Social Insurance of Vietnam to pay benefits to individuals receiving social insurance benefits before January 1, 1995. The aforementioned fund shall be accounted for and settled separately according to the provisions of the State Budget Law.

Article 3. The social insurance fund is formed through contributions from workers and employers, state budget contributions and support, interest from operations to preserve and grow the fund, and other revenues. The social insurance fund is managed centrally and uniformly throughout the entire system of the Social Insurance of Vietnam; it is independently accounted for and protected by the state.

Article 4. The social insurance fund is used to pay benefits to individuals participating in social insurance who are entitled to social insurance benefits from January 1, 1995, administrative expenses of the system of the Social Insurance of Vietnam, costs for preserving and growing the social insurance fund, and other expenditures.

Article 5. Investment funds for constructing physical infrastructure of the system of the Social Insurance of Vietnam are balanced and allocated gradually over several years by the state budget, supplemented by profits from implementing measures to increase the fund.

Article 6. Annually, the Social Insurance of Vietnam is responsible for preparing the budget for revenue and expenditure of the social insurance fund, administrative management expenses, and investment construction expenses, which are submitted to the Management Council of the Social Insurance of Vietnam for approval and sent to the Ministry of Finance. The General Director of the Social Insurance of Vietnam, based on the approved budget, assigns tasks for revenue and expenditure of the social insurance fund and investment construction to the Social Insurances of provinces and centrally governed cities.

Settlement of revenue and expenditure of the social insurance fund, investment construction, and procurement of working equipment shall be carried out according to the accounting regulations for social insurance issued by the Ministry of Finance and other financial management regulations prescribed by the state.

 

PART II
SOURCES OF FORMATION OF THE SOCIAL INSURANCE FUND

, Clause 1, Clause 2 Article 7a of this Regulation.The social insurance fund is formed from the following sources:

1. Contributions from workers and employers.

2. State contributions and support to ensure the implementation of social insurance benefits for workers.

3. Profits from implementing activities to preserve and grow the social insurance fund.

4. Revenues from sponsorships and aid from organizations and individuals both within and outside the country.

5. Other income.

Article 8. Contributions from participants in social insurance are implemented according to Points 1 and 2 of Article 36 of the Social Insurance Charter issued together with Decree No. 12/CP dated January 26, 1995 of the Government, and Points 1 and 2 of Article 34 of the Social Insurance Charter for officers, professional soldiers, non-commissioned officers, and soldiers of the People's Army and Public Security Forces issued together with Decree No. 45/CP dated July 15, 1995 of the Government, as follows:

1. Social Insurances at all levels are responsible for guiding and organizing the collection of social insurance contributions from all participants in social insurance according to the prescribed periods and quantities.

2. Monthly, units employing workers (including units, agencies, and organizations under the Ministry of National Defense, the Ministry of Home Affairs, and the State Cryptographic Service) are responsible for timely and fully contributing to the social insurance fund immediately after paying monthly wages to workers.

Article 9. The system of the Social Insurance of Vietnam opens deposit accounts for the social insurance fund at the State Treasury System and dedicated collection accounts for social insurance at the State Commercial Bank System. The balance on all deposit accounts of the system of the Social Insurance of Vietnam at State Commercial Banks and the State Treasury shall enjoy the interest rate for demand deposits as stipulated by State Commercial Banks.

 

CHAPTER III
PAYMENT OF SOCIAL INSURANCE

Article 10.

1. Social Insurances at all levels are responsible for organizing the payment of social insurance benefits according to state policies and regulations, promptly and fully to beneficiaries.

2. Payment of social insurance benefits directly implemented by Social Insurances at all levels or delegated to units employing workers, representatives of communes, wards, and towns must comply with financial management principles; payment vouchers must be legal and valid according to current state regulations on accounting vouchers.

3. Social Insurances at all levels have the right to refuse payment of social insurance benefits to beneficiaries when there is a conclusion from competent state authorities regarding fraudulent acts, falsification of documents to obtain social insurance benefits; they shall immediately implement measures to recover wrongly paid amounts (if any), while notifying the parties concerned, the units managing the workers currently employed, or the local authorities where the beneficiaries reside to pursue legal responsibility.

Article 11. The state budget allocates sufficient funds to pay benefits to individuals receiving social insurance benefits before January 1, 1995, including the following items:

1. Pensions.

2. Disability allowances.

3. Allowances for workers injured on the job and their caregivers, and provision of equipment for injured workers.

4. Occupational disease allowances.

5. Rubber plantation worker allowances.

6. Survivor's benefits (basic and maintenance) and funeral expenses.

7. Health insurance purchase fees.

8. Payment fees.

9. Other expenses (if any).

Article 12. The Vietnam Social Security shall fully comply with regulations on budget preparation, fund utilization, and final account settlement for expenditures to beneficiaries of social insurance funded by the State Budget in accordance with the provisions of the State Budget Law and guidelines issued by the Government and the Ministry of Finance regarding the implementation of budget allocation, preparation, execution, and final account settlement.

Article 13. The social insurance fund is used to pay benefits to individuals entitled to social insurance benefits from January 1, 1995, including the following items:

1. Retirement pension (regular and lump sum).

2. Allowances for workers injured in accidents and caregivers for injured workers, provision of equipment for injured workers.

3. Illness allowance.

4. Maternity allowance.

5. Occupational disease allowance.

6. Survivor's benefits (basic and maintenance) and funeral expenses.

7. Health insurance purchase fees.

8. Payment fees.

9. Other expenses.

 

PART IV
EXPENSES FOR THE MANAGEMENT OF THE VIETNAMESE SOCIAL INSURANCE SYSTEM

Article 14.

1. The regular management costs of the Vietnam Social Security system, sourced from the social insurance fund, are calculated as a percentage of the annual actual social insurance revenue (contributed by employees and employers). For the time being, management costs are calculated at a rate of 6% over five years.

2. Management costs of the Vietnam Social Security system are implemented according to current state standards and norms; additionally, special expense items of the sector are decided by the Vietnam Social Security Management Council.

3. The Vietnam Social Security has the responsibility to allocate management costs for the social security system at all levels in accordance with established expenditure standards and norms and assigned tasks; ensuring that the allocated funds do not exceed the total amount.

Article 15.

1. Annually, based on the approved management cost ratio, the Vietnam Social Security prepares a management cost budget for the Vietnam Social Security system, which is submitted to the Vietnam Social Security Management Council for approval and sent to the Ministry of Finance for review and supervision of implementation.

2. The Vietnam Social Security organizes the implementation of expenditures, final account settlement, and financial reporting in accordance with the accounting regulations for social insurance issued by the Minister of Finance.

Article 16.

1. Capital for constructing office premises for the Vietnam Social Security system is balanced by the State Budget over several years and partially from income generated by the preservation and growth of the social insurance fund.

2. When implementing construction investment using capital provided by the State Budget and capital derived from interest earned from fund growth investments, the Vietnam Social Security must comply with current government regulations on investment and construction management and guidance documents issued by relevant ministries and sectors concerning basic construction investment management.

 

CHAPTER V
ACTIVITIES FOR PRESERVING VALUE AND GROWTH OF THE SOCIAL INSURANCE FUNDS

Article 17.

1. The Vietnam Social Security may use temporarily idle funds from the social insurance fund to implement measures for value preservation and growth. Investments using the social insurance fund must ensure safety, minimize risks to the lowest possible level, preserve value, and achieve economic and social effectiveness.

2. The Vietnam Social Security may implement investment measures to preserve and grow the social insurance fund such as:

Purchasing Treasury bonds and bills of the State Treasury and state commercial banks.

Lending to the State Budget, the National Investment Support Fund, and state commercial banks.

Investing capital in certain large state projects and enterprises with capital needs approved and supported by the Prime Minister.

Article 18. Proceeds from the operation of social insurance fund investments are allocated and utilized as follows:

Allocating 50% over five years to supplement capital for the construction of material infrastructure for the entire social security system.

Allocating two welfare and benefit funds equal to three months' actual salary for the entire sector.

The remainder shall be added to the social insurance fund for preservation and growth./.