Decision No. 41/2007/QĐ-TTg On financial management for the Vietnam Social Security

Pursuant to …;

On financial management for the Vietnam Social Security

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PRIME MINISTER

Pursuant to the Law on Organization of the Government dated December 25, 2001;
Pursuant to the Law on Thrift and Combating Wastefulness No. 48/2005/QH1 dated November 29, 2005 of the National Assembly, term 11;

Pursuant to the Social Insurance Law No. 71/2006/QH11 dated June 29, 2006 of the National Assembly, term 11;

Pursuant to Decree No. 60/2003/NĐ-CP dated June 6, 2003 of the Government detailing and guiding the implementation of the Law on State Budget;

Pursuant to the Decree No. 63/2005/NĐ-CP dated May 16, 2005 of the Government on promulgating the Charter of Health Insurance;

Pursuant to the Decree No. 43/2006/NĐ-CP dated April 25, 2006 of the Government stipulating the autonomy and responsibility for performing tasks, organizational structure, staffing, and finance for public service units;

Considering the proposal of the Minister of Finance,

DECISION:

Article 1. Scope of application

This Decision regulates financial management for the Vietnam Social Security.

Article 2. Objectives and requirements

The financial regime for the Vietnam Social Security must ensure the following objectives and requirements:

1. Fulfilling the political mission of the Vietnam Social Security as prescribed by the State;

2. Reforming the financial mechanism, labor management mechanism, and management and utilization of operating funds to enhance efficiency and quality of work; practicing thrift and combating wastefulness to create conditions for investment and development of the unit, increase income, improve the living standards of officials and employees, and link responsibility with the interests of officials and employees of the Vietnam Social Security in business activities;

3. Promoting scientific organization and arrangement of work, streamlined organizational structure, and enhancing efficiency in implementing social insurance tasks;

4. Adhering to the provisions of the Social Insurance Law and current regulations;

5. Implementing financial transparency as prescribed by law.

Article 3. Sources of finance

The sources of finance managed by the Vietnam Social Security under this Decision include: the Compulsory Social Insurance Fund according to the Social Insurance Law (including state budget funds allocated for social insurance payments for workers retiring before January 1, 1995 and implementing pension benefits for military personnel directly participating in the resistance war against the United States to save the country from April 30, 1975 to the present, who have served at least 20 years in the military and have been discharged or retired); the Health Insurance Fund as stipulated in Decree No. 63/2005/NĐ-CP dated May 16, 2005 (referred to as the health insurance fund), and other lawful sources as prescribed by law.

Article 4. Financial Plan

1. Annually, the Vietnam Social Security shall prepare a financial plan including: plans for revenue and expenditure of the Compulsory Social Insurance Fund (including state budget funds ensuring payment of pensions and social insurance allowances for workers retiring before January 1, 1995 and pension benefits for military personnel directly participating in the resistance war against the United States to save the country from April 30, 1975 to the present, who have served at least 20 years in the military and have been discharged or retired); plans for revenue and expenditure of the Compulsory Health Insurance Fund and Voluntary Health Insurance; expenditure for managing the social insurance system; expenditure for construction, equipping infrastructure, and developing information technology projects; growth investment plans to be submitted to the Social Security Management Council for review, sent to the Ministry of Finance for consideration and consolidation, and submitted to the Prime Minister for allocation of the financial plan to the Vietnam Social Security.

2. Based on the financial plan assigned by the Prime Minister, the General Director of the Vietnam Social Security shall decide on assigning revenue and expenditure tasks to the Social Security of provinces and centrally-administered cities, the Social Security of the Ministry of Public Security, the Social Security of the Ministry of Defense, and the Social Security of the Government Office of Communication and Information, ensuring that total revenue does not fall below the revenue budget assigned by the Prime Minister, total expenditure does not exceed the expenditure budget assigned by the Prime Minister, and timely collection of all revenue sources and cost savings are implemented.

Article 5. Report on the management and use of Funds

Annually, the Vietnam Social Security reports on the management and use of the Funds to the Management Board for review, sends to the Ministry of Finance for consideration and consolidation, and submits to the Prime Minister for reporting to the National Assembly.

Article 6. Organizing collection, management, and implementation of social insurance benefit payments

1. Social Insurance at all levels organizes collection; manages and implements timely, full, and accurate benefit payments according to regulations and policies for those participating in mandatory social insurance and health insurance.

2. Organizes the payment of social insurance benefits either directly by the Social Insurance agencies at all levels or through contracts with employers, healthcare facilities, and representatives in communes, wards, and towns.

3. When there is a conclusion from competent state authorities regarding fraudulent behavior involving false documentation to receive social insurance and health insurance benefits, Social Insurance at all levels promptly stops payments; simultaneously informs the individual, employer, healthcare facility, or local authority where the individual resides to immediately recover improperly paid amounts and handle according to their authority; cooperates and transfers files to relevant legal authorities for handling as necessary.

Article 7. Budgeting, using funds, and finalizing accounts

The Vietnam Social Security fully implements regulations concerning budgeting, using funds, and finalizing accounts for individuals receiving social insurance benefits.

1. For funds allocated from the state budget to pay those retiring before January 1, 1995, and implementing pension policies for military personnel who directly participated in the resistance against the United States to save the country prior to April 30, 1975, having served over 20 years in the military and discharged: implement budgeting, using funds, and finalizing accounts according to the State Budget Law, Accounting Law, and guiding documents.

2. For the mandatory social insurance fund and health insurance fund: implement budgeting, using funds, and finalizing accounts according to the Accounting Law, guiding documents of the Accounting Law, and social insurance accounting regulations issued by the Ministry of Finance.

Article 8. Source for covering expenses and expenditure standards

1. Administrative management costs and investment construction, equipment, and information technology development costs of the Vietnam Social Security are deducted from the profits generated by the mandatory social insurance fund and health insurance fund's investments.

2. The General Director of the Vietnam Social Security is responsible for establishing expenditure standards appropriate to the industry's operations based on applying state-defined standards within the allocated budget as stipulated in this Decision, to be publicly disclosed and implemented throughout the industry.

Article 9. Management and use of Funds

1. The mandatory social insurance fund and health insurance fund are uniformly managed within the Vietnam Social Security system, recorded separately, and balanced according to each fund.

2. Idle funds of the Funds are invested according to the provisions of Article 11 of this Decision.

3. Profits from investment activities and growth from the Funds are used as follows:

a) To cover administrative costs of the Vietnam Social Security as provided in Clause 1 and 2 of Article 14 of this Decision;

b) For investment in construction, equipment, and information technology development projects approved by competent authorities;

c) The remainder is added to the mandatory social insurance fund and health insurance fund according to corresponding surplus rates.

Article 10. Opening deposit accounts

The Vietnam Social Security system opens deposit accounts for the social insurance fund and health insurance fund at the State Treasury System and commercial banks operating in Vietnam. The account balances earn interest rates as prescribed by the State Treasury and commercial banks.

Article 11. Principles and forms of social insurance fund investment

1. Investment activities from the social insurance fund must ensure the principles of safety, effectiveness, and recoverability when needed.

2. Forms of investment:

a) Purchasing government bonds, bills, and treasury bonds;

b) Lending to the Vietnam Development Bank and the Social Policy Bank at market interest rates;

c) Lending to government-owned commercial banks;

d) Investing in national key economic projects;

đ) Other forms of investment as prescribed by law.

3. Based on the actual annual socio-economic development situation and the investment principles and forms stipulated in Clauses 1 and 2 of this Article, the General Director of the Vietnam Social Security develops an investment plan to be submitted to the Management Board for decision.

Article 12. State budget allocation

Monthly, the state budget allocates funds to the mandatory social insurance fund so that the Vietnam Social Security can timely and fully pay pensions and social insurance allowances to those retiring before January 1, 1995, and military personnel who directly participated in the resistance against the United States to save the country prior to April 30, 1975, having served over 20 years in the military and discharged.

Article 13. On the use of establishment quota and labor

1. Based on the proposal of the Vietnam Social Security, the Ministry of Home Affairs determines the establishment quota framework of the Vietnam Social Security to be submitted to the Prime Minister for decision during each three-year period. Based on the establishment quota framework decided by the Prime Minister, the General Director of the Vietnam Social Security decides specifically the number of establishment quota of the Vietnam Social Security for each year.

2. The Vietnam Social Security proactively uses the assigned establishment quota; arranges, deploys, and utilizes cadres and civil servants appropriately in accordance with the assigned tasks, civil servant ranks, and the State's regulations on the responsibility for performing duties and public services under the Civil Servants Law and the Ordinance Amending and Supplementing Certain Provisions of the Civil Servants Law; implements reduction in establishment quota according to the State's policy.

3. In addition to the establishment quota assigned by the competent authority, the Vietnam Social Security may enter into service outsourcing contracts and labor contracts in accordance with the Labor Code and in line with the financial capacity assigned, ensuring equality of rights and obligations of workers and completing assigned tasks well.

Article 14. Regarding financial regime

1. Management costs of the Vietnam Social Security are allocated by the Prime Minister in the annual plan of tasks, including:

a) Regular expenses are determined based on the staffing index within the scope of the assigned establishment quota framework and the expenditure standard set forth in the Prime Minister's decision on the issuance of the standard for allocating regular budget expenditures annually for central administrative agencies; special business activities based on assigned tasks and the prescribed expenditure levels;

b) Non-regular expenses.

2. Contents of management costs:

a) Regular expenses:

- Regular expenses within the standard include:

+ Expenses paid to individuals: salaries, wages, allowances, contributions based on salary, bonuses, collective welfare benefits, and other payments to individuals as prescribed;

+ Expenses for public services, rentals, office supplies, information, propaganda, and communication;

+ Expenses for domestic conferences, travel expenses, and expenses for foreign trips and welcoming foreign delegations to Vietnam;

+ Expenses for social insurance and health insurance professional activities;

+ Expenses for purchasing assets, equipment, means, materials, and regular maintenance of fixed assets.

- Special regular expenses include:

+ Expenses for social insurance and health insurance collection work;

+ Expenses for social insurance and health insurance payment work;

+ Transfer fees;

+ Expenses for printing and distributing social insurance books and health insurance cards;

+ Expenses for printing forms and reporting documents;

+ Expenses for social insurance and health insurance propaganda;

+ Expenses supporting the social insurance activities of the Ministry of National Defense, the Ministry of Public Security, and the Government Cryptographic Office;

+ Expenses of the Vietnam Social Security Management Board;

+ Transportation and money protection expenses;

+ Other expenses (if any) as prescribed by the competent authority.

b) Irregular expenses:

- Training and retraining expenses;

- Research and development expenses;

- Large-scale repair expenses for fixed assets and purchase expenses for fixed assets.

When implementing the contents of expenses under Clause 2 of this Article, the Vietnam Social Security must comply with the expense regulations as prescribed by the State.

3. Investment construction costs, asset procurement costs, material infrastructure equipping costs, and information technology development costs according to approved projects.

Procedures and formalities for implementing basic construction projects and information technology development projects are carried out in accordance with current regulations.

4. Encouraging the Vietnam Social Security to arrange labor, reduce establishment quota, and save management costs while ensuring the completion of assigned tasks. Within the annual management cost budget allocated by the Prime Minister, the Vietnam Social Security implements measures to save funds, and the saved funds are used for the following purposes:

a) Supplementing income for cadres and civil servants: The Vietnam Social Security may apply an additional fund ratio not exceeding 1.0 times the state-prescribed salary level for cadre and civil servant positions to pay additional income to cadres and civil servants;

b) Establishing reward and welfare funds, and income stabilization reserve funds. For the two reward and welfare funds, the maximum contribution rate for both funds shall not exceed three months' average salary, wage, and additional income actually implemented in the year of the entire sector;

c) Establishing a fund for developing public service activities, with a minimum contribution rate of 25% of the saved funds.

The General Director of the Vietnam Social Security issues regulations on the establishment and use of the aforementioned funds to implement uniformly throughout the sector.

d) Any remaining saved funds at the end of the year (if any) can be transferred to the next year for continued use.

5. During the year of implementation, if the Vietnam Social Security exceeds the revenue target approved by the competent authority (after excluding objective factors that increase revenue), the budget for management costs will be supplemented to ensure actual increased management costs corresponding to the increase in the number of participants in social insurance compared to the initial plan approved by the competent authority at the beginning of the year. Increased management costs directly related to the increase in the number of managed participants from the initial plan include: expenses for social insurance and health insurance collection work; expenses for printing and distributing social insurance books and health insurance cards; transportation and money protection expenses; support expenses for social insurance activities of the Ministry of National Defense, the Ministry of Public Security, and the Government Cryptographic Office according to prescribed regulations. The Ministry of Finance reviews the annual increase in management costs and submits to the Prime Minister for decision to supplement the budget for the Vietnam Social Security.

Article 15. Effectiveness

This Decision shall take effect fifteen days after its publication in the Official Gazette. The financial regime for the Vietnam Social Security prescribed in this Decision shall apply from January 1, 2007. The Decisions No. 02/2003/QĐ-TTg dated January 2, 2003 of the Government on the issuance of the Financial Management Regulations for the Vietnam Social Security and No. 144/2005/QĐ-TTg dated June 14, 2005 of the Government on amending and supplementing certain articles of the Financial Management Regulations for the Vietnam Social Security issued together with Decision No. 02/2003/QĐ-TTg dated January 2, 2003 of the Government are hereby repealed.

Article 16. Implementation Organization

1. The Minister of Finance shall be responsible for guiding and supervising the implementation of this Decision.

2. The Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial People's Councils, Chairpersons of centrally governed city People's Councils, the Board of Directors of the Vietnam Social Security, and the General Director of the Vietnam Social Security shall be responsible for implementing this Decision./.