Decree No. 30/2016/ND-CP provides detailed regulations on investment activities from social insurance, health insurance, and unemployment insurance funds.

DECREE

Provisions on detailed investment activities fromsocial insurance fund, health insurance fund,

unemployment insurance fund

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||| Pursuant to the Law on Organization of the Government dated June 19, 2015;

Based on the Social Insurance Law dated November 20, 2013;0 the 11 Pursuant to Decree No. 32/2019/NĐ-CP dated April 10, 2019 of the Government on assigning tasks, procurement or tendering for the supply of products and services using state budget from regular operating expenses;14;

Pursuant to the Law VLabor Law dated November 16, 2013;

On the basis of Health Insurance Law dated November 14, 2008 and Law amended and supplemented some articles of the Health Insurance Law dated January 10, 2014;health insurance day 13 the 6 Pursuant to Decree No. 32/2019/NĐ-CP dated April 10, 2019 of the Government on assigning tasks, procurement or tendering for the supply of products and services using state budget from regular operating expenses;14;

the Director at the proposal of the Minister of Finance,

The Government issues this Decree to provide detailed provisions on investment activities from social insurance, health insurance, and unemployment insurance funds.social insurance fund, social insurance, health insurance, unemployment insurance.

PART I

GENERAL PROVISIONS

This Decree stipulates the special preferential import tariff rates of Vietnam to implement the ASEAN-China Trade in Goods Agreement and the conditions for enjoying such special preferential import tariff rates under the Agreement.scope of regulation

This Decree provides detailed provisions on investment activities from the social insurance, health insurance, and unemployment insurance funds managed by the Vietnam Social Security.

Article 2. Scope of Applicationenergy

This Decree applies to the Vietnam Social Security, agencies, organizations, and individuals related to investment activities from the social insurance, health insurance, and unemployment insurance funds.

Article 3. Investment Principles

Investment activities from the social insurance, health insurance, and unemployment insurance funds must ensure transparency, safety, efficiency, and capital recovery.

Article 4. Forms of investmentinvestment form

1. Investment activities from the social insurance, health insurance, and unemployment insurance funds shall be carried out through the following forms in order of priority:

a) Purchasing government bonds;

b) Lending to the state budget;

c) Depositing money; purchasing bonds, bills, promissory notes, deposit certificates at commercial banks with good quality operations according to the credit rating of the State Bank of Vietnam;

d) Lending to the Vietnam Development Bank and the Vietnam Social Policy Bank by purchasing government-guaranteed bonds issued by these banks;

e) Investing in important projects decided by the Prime Minister.

2. Investment in the two forms specified in Points d and e Clause 1 of this Article only applies to the unemployment insurance fund; the amount invested in these two forms shall not exceed 20% of the balance of the unemployment insurance fund of the previous year.

3. The Management Council of the Vietnam Social Security decides and is responsible to the Government for the forms and structure of investments of the social insurance, health insurance, and unemployment insurance funds based on the proposal of the General Director of the Vietnam Social Security.

Article 5. Building investment plans a) For PPP projects, the tenderer shall post the selection results of investors and attach the approval decision on the System no later than ten days from the date the document is issued in accordance with point b of Clause 2, Article 4 of Decree No. 35/2021/NĐ-CP.

1. Based on the annual income and expenditure situation of the social insurance, health insurance, and unemployment insurance funds and the investment forms prescribed in Article 4 of this Decree, the Vietnam Social Security builds an investment plan to submit to the Management Council of the Vietnam Social Security for approval.

2. The investment plan from the social insurance, health insurance, and unemployment insurance funds is built together with the preparation of the annual revenue and expenditure budget and included in the annual revenue and expenditure budget of the Vietnam Social Security, including:

a) Evaluation of the implementation of investment activities in the previous year, estimated implementation in the current year, detailed by each investment form, including indicators: Balance of investment debt, amount of investment, amount of recovered capital (principal, interest), investment interest rate;

b) Estimated investment in the planned year, including indicators: Total amount of investment funds used, investment forms, investment structure, investment period, investment interest rate, amount of recovered capital (principal, interest), end-of-year balance of investment debt.

3. The Vietnam Social Security must carry out investments in accordance with the investment forms, structures, and methods prescribed in this Decree and the approved investment plan by the Management Council. During the implementation process, if it is deemed necessary to adjust or supplement the investment plan to improve investment efficiency, the Vietnam Social Security reports to the Management Council for consideration and decision.

Chapter II

METHODS OF IMPLEMENTING INVESTMENTS

Article 6. Purchasing Government Bonds

1. Government bonds include treasury bills, treasury bonds, national construction bonds issued by the Ministry of Finance in the domestic market and are purchased according to the following forms:

a) Purchasing bonds from the State Treasury according to the laws on bond issuance in the domestic market;

b) Purchasing government bonds from organizations and individuals according to the laws on government bond transactions.

2. The amount of bond purchases is decided by the General Director of the Vietnam Social Security based on the approved fund investment plan by the Management Council of the Vietnam Social Security.

3. The investment period for purchasing bonds depends on the term of each type of government bond specified in Clause 1 of this Article.

4. The repayment of principal and interest of government bonds upon maturity is implemented according to the laws on government bond issuance in the domestic market.

5. In case it is necessary to sell government bonds to recover capital ahead of schedule, the Vietnam Social Security shall issue a document explaining the reasons and submit it to the Management Council of the Vietnam Social Security for consideration and decision.

Article 7. Lending to the State Budget

1. The amount of lending shall be decided by the General Director of the Vietnam Social Security based on the borrowing needs of the state budget and the investment plan for the fund that has been approved by the Management Council of the Vietnam Social Security.

2. The term of lending shall be calculated from the date of lending to the date of debt repayment; the specific term of each loan shall be agreed upon between the Vietnam Social Security and the Ministry of Finance but shall not exceed ten years at maximum.

3. The interest rate for lending shall be equal to the interest rate of government bonds issued with the same maturity period at the nearest time within three months prior to the lending date. In case there is no issuance of government bonds with the same maturity period within three months prior to the lending date, the Vietnam Social Security and the Ministry of Finance shall agree on the lending interest rate based on referring to the transaction interest rate of government bonds with remaining maturity equivalent to the lending period or the issuance interest rate of government bonds with maturity period closest to the lending period at the nearest time.

4. Debt recovery:

a) The principal shall be paid once when due or prepaid one or more times and must be fully paid when due;

b) Interest shall be paid annually based on the outstanding balance of the loan and the interest rate of each loan contract. The specific interest calculation and payment dates for each loan shall be agreed upon between the Vietnam Social Security and the Ministry of Finance but must be clearly stated in the loan contract.

5. In case of due repayment of the principal, if the Ministry of Finance has a document requesting an extension of the repayment period or a re-lending of the principal, the Vietnam Social Security shall proceed as follows:

a) In case of debt extension: Each loan can only be extended once, with a maximum term of one year; the lending interest rate shall continue to be implemented according to the interest rate of the contract when due or the interest rate agreed upon by the Vietnam Social Security and the Ministry of Finance as stipulated in Clause 3 of this Article;

b) In case of re-lending: The Ministry of Finance does not have to repay the principal but must pay all the interest of the due repayment contract, then jointly with the Vietnam Social Security establish a new loan contract according to the provisions of Clause 6 of this Article; the term of the new loan contract shall be calculated from the due repayment date of the old contract. Based on the old loan contract and the new loan contract, the Vietnam Social Security shall record the recovery of the principal of the due loan and the new loan, while the Ministry of Finance shall record the income and expenditure of the state budget;

c) The procedures for debt extension and re-lending as stipulated in this Clause must be completed before the due date of the principal repayment, at least five working days in advance.

6. Lending to the state budget shall be established in a loan contract. The loan contract must clearly state the amount of lending, the term of lending, the lending interest rate, the interest calculation date, the payment date, the payment method, the rights and responsibilities of both parties, and other related agreements concerning the lending.

Article 8. Depositing funds at commercial banks with good quality of operation as rated by the State Bank of Vietnam

1. The amount of depositing funds at commercial banks shall be decided by the General Director of the Vietnam Social Security based on the investment plan for the fund that has been approved by the Management Council of the Vietnam Social Security.

2. The term of depositing funds shall be calculated from the deposit date to the withdrawal date. The specific term shall be selected by the Vietnam Social Security based on the various types of deposit terms offered by commercial banks but shall not exceed three years at maximum.

3. The deposit interest rate shall be implemented according to the interest rate of fixed-term deposits offered by commercial banks but must ensure that it is not lower than the average interest rate of fixed-term deposits at the same maturity period at the deposit date of four branches in Hanoi belonging to four commercial banks: Vietnam Joint Stock Commercial Bank for Industry and Trade, Vietnam Joint Stock Commercial Bank for Foreign Trade, Vietnam Joint Stock Commercial Bank for Investment and Development, and Vietnam Agricultural and Rural Development Bank. The selection of four branches belonging to four commercial banks as stipulated in this Clause shall be decided by the General Director of the Vietnam Social Security.

4. The repayment of principal and interest shall be carried out in accordance with the laws governing transactions of fixed-term deposits at credit institutions.

In case of due payment of interest or principal, if the commercial bank fails to make timely payment, in addition to having to pay the full amount of overdue interest or principal, it must also pay late interest on the overdue amount at 150% of the deposit interest rate at the payment date, based on the overdue amount and the overdue period.

Article 9Purchasing bonds, bills, promissory notes, and deposit certificates issued by commercial banks with good quality of operation as rated by the State Bank of Vietnam

1. The purchase of bonds, bills, promissory notes, and deposit certificates issued by commercial banks must be part of the investment plan for the fund that has been approved by the Management Council of the Vietnam Social Security.

2. The investment term for purchasing bonds, bills, promissory notes, and deposit certificates depends on the maturity period of each type of negotiable instrument issued by commercial banks but shall not exceed five years at maximum.

3. The interest rate for purchasing bonds, bills, promissory notes, and deposit certificates shall be implemented according to the issuance interest rate of bonds, bills, promissory notes, and deposit certificates issued by commercial banks but must ensure that it is not lower than the issuance interest rate of government bonds with the same maturity period at the nearest time within three months prior to the purchase date. In case there is no issuance of government bonds with the same maturity period within three months prior to the purchase date, the interest rate for purchasing bonds, bills, promissory notes, and deposit certificates shall be implemented according to the deposit interest rate at commercial banks stipulated in Clause 3 of Article 8 of this Decree.

4. The repayment of principal and interest on bonds, bills, promissory notes, and deposit certificates upon maturity shall be carried out in accordance with the laws governing the issuance of bonds, bills, promissory notes, and deposit certificates by commercial banks.

5. In cases where it is necessary to sell bonds, bills, promissory notes, or deposit certificates to recover capital before maturity, the Vietnam Social Security shall issue a document clearly stating the reasons and submit it for consideration and decision by the Management Council of the Vietnam Social Security.

10. Purchasing government-guaranteed bonds issued by the Vietnam Development Bank and the Vietnam Social Policy Bank 10. Purchasing government-guaranteed bonds issued by the Vietnam Development Bank and the Vietnam Social Policy Bank

1. The amount of government-guaranteed bonds purchased shall be decided by the General Director of the Vietnam Social Security based on the investment fund plan approved by the Management Council of the Vietnam Social Security and the investment capital ratio stipulated in Clause 2, Article 4 of this Decree.

2. The investment period for purchasing government-guaranteed bonds shall depend on the term of each type of government-guaranteed bond but shall not exceed five years at maximum.

3. The repayment of principal and interest on government-guaranteed bonds upon maturity shall be carried out in accordance with the laws governing the issuance of domestic government-guaranteed bonds.

4. In cases where it is necessary to sell government-guaranteed bonds to recover capital before maturity, the Vietnam Social Security shall issue a document clearly stating the reasons and submit it for consideration and decision by the Management Council of the Vietnam Social Security.

Article 11. Investing in important projects as decided by the Prime Minister

1. The project to be invested in is an important project using part of the public investment capital as prescribed by the laws on public investment, which has been decided on by the Prime Minister regarding the investment policy, including the objectives, scale, total investment cost, capital structure, location, time, and progress of implementation.

2. The level of investment capital, investment period, and investment interest rate:

a) The level of investment capital in each project shall be based on the needs of the investor, the investment fund plan approved by the Management Council of the Vietnam Social Security, and the investment capital ratio stipulated in Clause 2, Article 4 of this Decree;

b) The investment period shall vary according to each project but shall not exceed five years at maximum.

In cases where the repayment of principal is due and the investor concentrates resources to expand production and business activities or fails to timely concentrate capital for repayment due to objective reasons, if the investor submits a written request for extension of the repayment period, the General Director of the Vietnam Social Security shall consider and decide on extending part or all of the principal repayment within a maximum period of three years, depending on the specific circumstances.

c) The investment interest rate must ensure that it is not lower than the interest rate of government bonds with the same term at the nearest point in the three months prior to the investment date, excluding related fees (if any). If there is no issuance of government bonds with the same term in the three months prior to the investment date, then the interest rate shall be agreed between the Vietnam Social Security and the investor but must ensure that it is not lower than the interest rate for depositing money as stipulated in Clause 3, Article 8 of this Decree.

3. When the investor has a need to raise funds from the unemployment insurance fund, they must submit to the Vietnam Social Security the following documents:

a) Documents proving that the project is an important one using part of the public investment capital, which has been decided on by the Prime Minister regarding the investment policy;

b) The actual capital requirements for implementing the project, specifying the need to raise funds from the unemployment insurance fund, the purpose of use, and the expected investment interest rate; commitment to use the investment capital for its intended purpose and effectively.

4. Within thirty days from the date of receiving the complete documents from the investor as stipulated in Clause 3 of this Article, the Vietnam Social Security must complete the examination of the documents proving that the project is an important one decided on by the Prime Minister regarding the investment policy; propose the level of investment capital, investment period, and investment interest rate, submit for approval by the Management Council of the Vietnam Social Security to organize the implementation. In case of disagreement with the investment, the Vietnam Social Security must reply in writing and specify the reasons to the investor.

5. The implementation of investment in important projects shall be established in a contract, which must clearly record the name of the investment project decided on by the Prime Minister regarding the investment policy (including objectives, scale, total investment cost, capital structure, location, time, and progress of implementation), the level of investment capital, investment period, investment interest rate, disbursement and payment methods, rights and obligations of both parties, dispute resolution, commitments of both parties, and other related agreements.

6. The Vietnam Social Security has the right and obligation to inspect and supervise the use of capital; request the investor to report on the use of capital and prove that the investment capital of the Vietnam Social Security is used for its intended purpose.

Chapter III

USE OF INCOME FROM INVESTMENT ACTIVITIES,

HANDLING RISKS IN INVESTMENT ACTIVITIES

Article 12Using income from investment activities

All annual income generated from investment activities as stipulated in this Decree and interest arising on accounts reflecting social insurance, health insurance, and unemployment insurance revenues and expenditures, as regulated by the financial management mechanisms for social insurance, health insurance, and unemployment insurance, shall be used as follows:

1. Establishing a risk reserve fund from the social insurance, health insurance, and unemployment insurance funds according to the following principles:

a) The annual risk reserve fund contribution rate shall not exceed 2% of the annual income from investment activities until the balance of the risk reserve fund equals 5% of the previous year's outstanding investment balance in the forms specified in Points c and d of Clause 1, Article 4 of this Decree. The specific annual contribution rate shall be decided by the General Director of the Vietnam Social Security;

b) The risk reserve fund shall be used to offset losses resulting from risks handled in accordance with Article 13 of this Decree;

c) During the period when the risk reserve fund is not used, it may be invested in the forms specified in Points a and b of Clause 1, Article 4 of this Decree.

2. The remaining portion shall be allocated to the respective funds in proportion to the average balances of each fund over the total average balance of the funds in the year and shall be used as follows:

a) The interest allocated to the social insurance fund after deducting management costs for social insurance as prescribed by law shall be supplemented to the component funds according to the ratio of the average balance of each component fund to the total average balance of all component funds in the year;

b) The interest allocated to the health insurance fund shall be supplemented to the reserve fund for general regulation;

c) The interest allocated to the unemployment insurance fund shall be supplemented to the unemployment insurance fund.

Article 13. Risk Management in Investment Activities

1. Scope of Risk Management:

a) Investments in the form of deposits; purchasing bonds, bills, promissory notes, deposit certificates at commercial banks are subject to risks due to the commercial bank encountering risks as prescribed by law;

b) Investments in important projects decided by the Prime Minister are subject to risks due to the project owner facing difficulties caused by economic downturns or force majeure including natural disasters, fires, enemy attacks.

2. Measures for Managing Risks:

a) Extending debt is the act of the Vietnam Social Security temporarily not collecting part or all of the investment amount when it is due for recovery within a maximum period of up to three years, depending on specific cases;

b) Writing off debt is the act of the Vietnam Social Security temporarily not collecting part or all of the investment amount and accrued interest when it is due for recovery within a certain period without charging interest on the unpaid principal during the write-off period; the maximum write-off period does not exceed three years;

c) Waiving interest is the act of the Vietnam Social Security not collecting part or all of the investment interest of the related party when it is due for payment;

d) Selling debt is the act of the Vietnam Social Security transferring the creditor's rights over the risky investment to the buyer and receiving payment from the buyer, carried out in accordance with the provisions of the law on buying and selling debts. The purchase and sale of debts must be established in a contract, clearly defining the sale price, transferring the creditor's rights from the seller to the buyer, and other relevant agreements. In case the amount received from the buyer is less than the risk amount (if any), the difference will be handled according to the provisions of point đ Clause 2 of this Article;

e) Waiving principal is the act of the Vietnam Social Security not collecting part or all of the investment principal of the related party. The source for compensating the waived debt is drawn from the risk reserve fund as stipulated in Clause 1, Article 12 of this Decree.

3. Principles for Managing Risks:

a) The investment must be implemented in accordance with the authority and investment method prescribed in this Decree;

b) There must be sufficient documentation proving that the investment risk was caused by objective reasons resulting in partial or full damage to the investment capital (principal, interest);

c) The handling of risks must be considered on a case-by-case basis based on the cause of the risk, the degree of risk, ensuring complete legal documentation, following the correct procedures and legal provisions;

d) A single investment subject to risk may apply one or more risk management measures prescribed in Clause 2 of this Article.

4. Authority for Managing Risks:

a) The General Director of the Vietnam Social Security examines and decides on the handling of cases of extending debt as prescribed in Point a, Clause 2, Article 4 of this Decree;

b) The Management Board of the Vietnam Social Security examines and decides on the handling of cases of writing off debt as prescribed in Point b, Clause 2, Article 4 of this Decree based on the proposal of the General Director of the Vietnam Social Security;

c) The Prime Minister examines and decides on the handling of cases of waiving interest, selling debt, and waiving debt as prescribed in Points c, d, and đ, Clause 2, Article 4 of this Decree based on the proposal of the Management Board of the Vietnam Social Security.

5. When a risk occurs leading to the inability to recover the investment capital on time or at all, the Vietnam Social Security shall proceed as follows:

a) Timely report to the Management Board of the Vietnam Social Security, the competent state management agency, and related agencies to verify and assess the extent of damage and loss of assets and prepare a file requesting handling;

b) Take the lead and coordinate with the Ministry of Finance, the Ministry of Labor, Invalids and Social Affairs, the Ministry of Health, and related agencies to appraise and propose measures for handling to be submitted to the competent authority for examination and decision.

Chapter IV

IMPLEMENTING PROVISIONS

Article 14. Transitional Provisions

For contracts with State-owned Commercial Banks, the Vietnam Development Bank, and the Vietnam Social Policy Bank signed before January 1, 2016, the Vietnam Social Security and related parties shall continue to implement according to the signed agreements until the end of the contract term. If these contracts are extended, they shall be carried out in accordance with this Decree.

Article 15. Effective date

1. This Decree takes effect from June 16, 2016.

2. Decree No. 28/2015/NĐ-CP dated March 12, 2015 of the Government detailing implementation of certain provisions of the Law on Employment regarding unemployment insurance and Circular No. 113/2012/TT-BTC dated July 17, 2012 of the Minister of Finance detailing activities for the preservation and growth of insurance funds managed by the Vietnam Social Security cease to be effective from the date this Decree takes effect.

Article 16. Responsibilities for implementation1. The Ministry of Finance shall be responsible for inspecting and supervising the implementation of investments from the social insurance, health insurance, and unemployment insurance funds managed by the Vietnam Social Security, ensuring that such investments comply with relevant regulations.

2. The State Bank of Vietnam shall be responsible for submitting to the Vietnam Social Security the credit rating results of commercial banks annually to support safe and effective investment activities.

3. The Vietnam Social Security shall be responsible for:

a) Directing the investment management department to regularly update information on the issuance of government bonds, bonds, bills, promissory notes, deposit certificates, and interest rates for deposits from commercial banks with good operational quality; comparing the amount invested, the amount due for recovery, and the balance of each type of investment and investment target to serve the determination of actual investment interest rates, timely and accurate principal and interest recovery;

b) Reporting to the Management Council of the Vietnam Social Security every three months on the status and results of investment activities from the social insurance, health insurance, and unemployment insurance funds;

c) Implementing the retention of investment activity records from the social insurance, health insurance, and unemployment insurance funds in accordance with legal provisions;

d) Providing complete and timely data and materials related to investment activities from the social insurance, health insurance, and unemployment insurance funds to the Ministry of Finance, the Ministry of Labor - Invalids and Social Affairs, the Ministry of Health, and competent state agencies upon request.

Ministers, Heads of ministerial-level agencies, Heads of agencies under the Government, Chairpersons of provincial People's Committees directly under the Central Government, and the Management Council of the Vietnam Social Security are responsible for implementing this Decree./.

Article 17. Responsibility for Implementation

The Ministers, Heads of ministerial-level agencies, Heads of government agencies, Chairpersons of provincial People's Committees under the central government, the Social Insurance Management Board are responsible for implementing this Decree./.