Decision No. 02/2003/QD-TTg dated January 02, 2003 of the Prime Minister promulgating the regulation on financial management applicable to Vietnam Social Insurance

DECISION

PROMULGATING THE REGULATION ON FINANCIAL MANAGEMENT APPLICABLE TO VIETNAM SOCIAL INSURANCE

THE PRIME MINISTER

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the Government’s Decree No.12/CP of January 26, 1995 promulgating the Social Insurance Regulation;

Pursuant to the Government’s Decree No.45/CP of July 15, 1995 promulgating the Social Insurance Regulation for army officers, professional army men, non-commissioned officers and soldiers of the People’s Army and the People’s Police;

Pursuant to the Government’s Decree No.58/1998/ND-CP of August 13, 1998 promulgating the Medical Insurance Regulation;

Pursuant to the Government’s Decree No.100/2002/ND-CP of December 6, 2002 on the functions, tasks, powers, responsibility and organizational apparatus of Vietnam Social Insurance;

At the proposal of the Finance Minister,

DECIDES:

Article 1.- To promulgate together with this Decision the Regulation on Financial Management applicable to Vietnam Social Insurance.

Article 2.- This Decision takes effect as from January 1, 2003; the previous regulations contrary to this Decision are all hereby annulled.

Article 3.- The Finance Minister shall have to guide and inspect the implementation of the Regulation promulgated together with this Decision.

Article 4.- The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government, the presidents of the People’s Committees of the provinces and centrally-run cities, the Managing Board of Vietnam Social Insurance, the general director of Vietnam Social Insurance shall have to implement this Decision.

REGULATION

ON FINANCIAL MANAGEMENT APPLICABLE TO VIETNAM SOCIAL INSURANCE
(Promulgated together with the Prime Minister’s Decision No.02/2003/QD-TTg of January 2, 2003)

Chapter I

GENERAL PROVISIONS

Article 1.- This Regulation shall apply to financial management operations of the entire system of Vietnam Social Insurance.

Article 2.- The Finance Ministry shall allocate enough funding for Vietnam Social Insurance to make payment to subjects having enjoyed the social insurance regimes before October 1, 1995.

Article 3.-

1. The Social Insurance Fund is formed from the contributions of the participants in social insurance and medical insurance; the contributions of employers; the State’s contributions and support; profits from activities of preserving and developing the Fund and other lawful revenue sources.

2. The Social Insurance Fund is managed in a concentrated, unified, democratic and public manner in the entire system of Vietnam Social Insurance; accounted according to constituent funds, independent from the State budget and protected by the State.

Article 4.- The Social Insurance Fund is used for payment of social insurance entitlements to subjects enjoying social insurance after October 1, 1995; payment of medical insurance to subjects participating in medical insurance; payment of expenses for management of the apparatus of the system of Vietnam Social Insurance; payment of expenses for capital construction, and other expenses.

Article 5.- The funding for construction of material foundations of the system of Vietnam Social Insurance shall be channeled from profits earned from the application of measures to preserve and develop the Fund.

Article 6.-

1. Annually, Vietnam Social Insurance shall have to estimate the social insurance revenues and expenditures (expenditures on social insurance, medical insurance, management, the construction of material foundations...) and submit them to the Managing Board for adoption and send them to the Finance Ministry for sum-up and submission to the Government so that the latter shall assign tasks to Vietnam Social Insurance.

2. The general director of Vietnam Social Insurance shall base on the revenue and expenditure tasks assigned by the Government and the estimates adopted by the Managing Board to allocate and assign tasks to the provincial/municipal Social Insurance on the principle that the total revenue is not lower and the total expenditure is not higher than those assigned by the Government.

3. To settle the insurance fund revenues and expenditure according to the current regulations of the State and the social insurance accounting regime issued and guided by the Finance Ministry.

Article 7.- The payment to insurance regime beneficiaries shall be effected as follows:

1. The social insurance offices of all levels shall have to organize the payment to insurance beneficiaries in time and fully in accordance with the State’s regimes and policies.

2. The payment of insurance entitlements shall be effected directly by social insurance offices at all levels or contracted to labor employing units, medical examination and treatment establishments or representatives of communes, wards, district towns and must comply with the State’s regulations.

3. The social insurance offices at all levels must stop the payment to insurance beneficiaries upon the conclusions of the competent State agencies on deceptive acts, dossier or document forgery for enjoyment of the insurance regime; and at the same time immediately apply measures to recover the money amounts already wrongly paid; notify such to the subjects, labor-employing units or administrations of the localities where the subjects enjoying the insurance regime reside for handling according to competence; coordinate with and transfer dossiers to, law bodies for handling according to law.

Chapter II

FORMING SOURCES, USE AND MANAGEMENT OF SOCIAL INSURANCE FUND

Article 8.- The Social Insurance Fund is formed from the following sources:

1. The compulsory contributions by the employers and the employees participating in social insurance..

2. The compulsory and voluntary contributions by the employers and employees participating in medical insurance.

3. The State’s contributions and support in order to ensure the social insurance regimes for laborers.

4. The State’s support and contributions to medical insurance for the poor and social policy beneficiaries.

5. Profits earned from the application of measures to preserve and develop the Social Insurance Fund.

6. Other lawful revenue sources.

Article 9.- The collection of premiums paid by subjects participating in insurance under the provisions of law shall be effected as follows:

1. The social insurance offices at all levels shall have to guide and organize the collection of insurance premiums of all subjects participating in the insurance according to regulations.

2. Monthly, the labor-employing units (including units, agencies and organizations of the Ministry of Defense, the Ministry of Public Security and the Government Cipher Committee) shall have to fully and promptly pay the insurance premiums into the Social Insurance Fund immediately after the monthly payment of wages to the laborers.

3. Where labor-employing units defer the insurance premium payments for 30 days or more as compared to the prescribed time limit, in addition to the deferred payment amounts and administrative fines under the current regulations, they must also pay fines for the delayed payment at the overdue loan interest rates set by the State Bank of Vietnam at the time of retrospective payment. For units which deliberately violate or delay the payment, the social insurance offices shall be entitled to request the State Treasury and/or the banks where the units make transactions to deduct money from the units’ accounts for full payment of the insurance premiums and late payment fines without the payment consents of the labor-employing units (except for units allowed by the Government or the Prime Minister to defer their payment).

4. The Finance Ministry shall assume the prime responsibility and coordinate with the Ministry of Labor, War Invalids and Social Affairs, the Health Ministry and concerned agencies in setting the levels and time of paying the social and medical premiums for each type of subjects, including social policy subjects according to the current regulations.

Article 10.- The Vietnam Social Insurance system is entitled to open the Social Insurance Fund deposit accounts at the State Treasury system and the State-run commercial bank system. The credit balance on the deposit accounts shall enjoy the deposit interest rates according to the regulations of the commercial banks and the State Treasury.

Article 11.- The Social Insurance Fund is uniformly managed within the Vietnam Social Insurance system, accounted separately and balanced between revenues and expenditures according to each constituent fund ( the Pension and Allowance Fund; the Compulsory Medical Examination and Treatment Fund and the Voluntary Medical Examination and Treatment Fund). Annually, if the constituent funds are recorded with revenues larger than expenditures, the credit balance shall be carried forwards to the following year; if the total revenues are smaller than the total expenditures, the credit balances of other funds are allowed to be used to ensure the full and timely payment of entitlements to the beneficiaries according to regulations.

After the whole branch’s annual financial settlement reports are approved, the Managing Board of the Social Insurance shall report to the Prime Minister on the plans for settlement of the deficit funding of each constituent fund.

Article 12.- The Pension and Allowance Fund

1. The Pension and Allowance Fund is formed from the following sources:

a) The social insurance premiums of employers and employees.

b) The State’s contributions and support in order to ensure the implementation of social insurance regime for laborers.

c) Profits earned from the application of measures to preserve and develop the Fund.

d) Other lawful revenues.

2. The Pension and Allowance Fund is used for payment of:

a) Pensions (regular and lump sum payment).

b) Allowances for labor accident victims and their attendants, for the supply of equipment and devices for labor accident victims.

c) Ailment allowances.

d) Maternity allowances.

e) Occupational disease allowances.

f) Death allowances (basic quota and support) and burial costs.

g) Health recuperation and restoration expenses.

h) Medical insurance premiums as prescribed.

i) Payment fees.

j) Other expenses.

Article 13.- Compulsory Medical Examination and Treatment Fund.

1. The Compulsory Medical Examination and Treatment Fund is formed from the following sources:

a) Compulsory contributions by employers and employees subject thereto.

b) The State’s support for social policy beneficiaries and people with meritorious services to the revolution according to regimes.

c) Profits yielded from the application of measures to preserve and develop the Fund.

d) Donations and aid of organizations and individuals inside and outside the country.

e) Other lawful revenues.

2. The Compulsory Medical Examination and Treatment Fund is used for payment of expenses for medical examination and treatment inside and outside the hospitals for subjects participating in compulsory medical insurance, including:

a) Medical examination, diagnosis and treatment.

b) Tests, X-ray, functional probes.

c) Medicines on the lists prescribed by the Health Ministry.

d) Blood and fluid transfusions.

e) Operations and surgeries.

f) The use of medical supplies and equipment as well as hospital beds.

Article 14.- Voluntary Medical Examination and Treatment Fund

1. The Voluntary Medical Examination and Treatment Fund is formed from the following sources:

a) Voluntary contributions by participants in medical insurance.

b) The State’s support.

c) Profits yielded from the application of measures to preserve and develop the Fund.

d) Donations and aid of organizations and individuals inside and outside the country.

e) Other lawful revenues.

2. The Voluntary Medical Examination and Treatment Fund is used for payment of expenses for medical examination and treatment given to subjects corresponding to the premium levels and insured scopes chosen by the insurance participants. The contribution and enjoyment levels, the interests in medical examinations and treatments corresponding to each premium level shall be applied uniformly nationwide.

Chapter III

MANAGEMENT AND USE OF FUNDING SOURCES ALLOCATED BY THE STATE BUDGET FOR SOCIAL INSURANCE PAYMENT

Article 15.- Vietnam Social Insurance shall fully implement the regulations on estimation and use of funding and settlement of funding paid to social insurance beneficiaries, which are allocated by the State budget, strictly according to the provisions of the State Budget Law.

Article 16.- The State budget shall allocate enough funding according to the settled payments to subjects enjoying social insurance regimes before October 1, 1995, including the payments of:

1. Pension.

2. Working capacity-loss allowances.

3. Allowances for labor accident victims and their attendants, the supply of equipment and devices for labor accident victims.

4. Occupational disease allowances.

5. Allowances for the rubber industry’s workers.

6. Death allowances (basic quota and support) and burial costs.

7. Medical insurance premiums according to regimes.

8. Payment fees.

9. Other expenses (if any).

Article 17.- Annually, Vietnam Social Insurance shall advance funding from the Pension and Allowance Fund for timely and full payment of pension and allowances to subjects, allocated by the State budget; then later the State budget shall refund the Pension and Allowance Fund according to the actual payment under the State’s policies and regimes.

Chapter IV

EXPENSES FOR MANAGEMENT OF VIETNAM SOCIAL INSURANCE SYSTEM

Article 18.-

1. Expenses for management of operation of the Vietnam Social Insurance system:

a) Regular expenditures of the Vietnam Social Insurance system (including expenses for scientific researches, training and re-training) in service of the operation of the entire branch; excluding the expenses for overhaul of fixed assets, procurement of assets from investment capital sources under the projects approved by competent authorities.

b) The source of funding for annual regular expenditures of the Vietnam Social Insurance system is channeled from profits yielded from the application of measures to preserve and develop the Funds; the deduction level is equal to 4% of the actually collected amount of social insurance and medical insurance premiums paid by the employers and the subjects participating in the insurance, to be applied from 2003 to 2005.

c) If Vietnam Social Insurance fulfills its tasks, saving the regular managerial expenditures, the surplus can be used to supplement the following expenditures:

- Addition to wages, remuneration for laborers in the whole branch according to the extent of their work performance, but the maximum income shall not exceed 2.5 times the wage fund according to current regulations.

- Payment of wages and remuneration for contractual laborers (under the provisions of the Labor Code) in case of necessity in order to ensure the fulfillment of work.

- Addition to the reward and welfare funds, but not in excess of three months’ average actual wages of the whole branch.

- Additional allowances besides the State’s common policies to laborers within the branch, who volunteer to resign from work upon the implementation of the policy on labor reorganization and payroll streamlining. The allowance levels shall be decided by the general director of Vietnam Social Insurance.

- The setting up of reserve fund for stabilization of income for officials and employees. The appropriation level shall be decided by the general director of Vietnam Social Insurance.

- The remainder (if any) after effecting the above five spending contents must be remitted into the insurance funds.

2. The payment of premiums and enjoyment of social insurance and medical insurance regimes by Vietnam Social Insurance officials and employees shall be calculated according to the wage coefficients prescribed in the Government’s Decree No.25/CP of May 23, 1993 and the minimum wage level set by the Government.

3. The expenditure on management of the Vietnam Social Insurance system shall be decided by the Managing Board on the basis of the State’s current norms and criteria and the branch’s particular operation, ensuring the principle of thrift and efficiency.

4. Vietnam Social Insurance shall have to allocate managerial expenditures for the social insurance offices at all levels in compatibility with their assigned tasks, ensuring that the funding allocated to the social insurance offices of all levels must not exceed the total.

Article 19.-

1. Annually, basing itself on the managerial expenditure level prescribed at Point b, Article 18, Vietnam Social Insurance shall estimate the managerial expenditure of the Vietnam Social Insurance system and submit it to the Managing Board for approval, and to the Finance Ministry for monitoring and supervising the implementation thereof.

2. Vietnam Social Insurance shall organize the performance of the tasks of revenue, expenditure, settlement and financial reporting according to the current regulations.

Article 20.-

1. The funding for investment in the construction of material foundations of the Vietnam Social Insurance system shall be channeled from the profits earned from the application of preservation and growth measures prescribed in Clause 3, Article 22 of this Decision.

2. When using funding for investment in the construction of material foundations, Vietnam Social Insurance must fully observe the current regulations on management of investment and capital construction funding.

Chapter V

ACTIVITIES OF PRESERVING THE VALUE AND GROWTH OF SOCIAL INSURANCE FUND

Article 21.-

1. Vietnam Social Insurance shall have to implement measures to preserve the value and growth of the social insurance funds. The use of temporarily idle money of the insurance funds for investment must ensure their safety, preserve their value and ensure socio-economic efficiency.

2. Measures for preservation and growth of insurance funds shall include:

- The purchase of debentures, notes, promissory notes, bonds of the State Treasury and State-run commercial banks.

- Providing loans to the State budget, the Development and Investment Assistance Fund, the State-run commercial banks, the policy bank.

- Investment in a number of capital-demanding projects, to be decided by the Prime Minister.

Article 22.- Profits yielded annually from investment and growth of the insurance funds shall be distributed and used as follows:

1. Deduction of funding for management of the Vietnam Social Insurance system as provided for at Point b, Clause 1, Article 18.

2. Deduction for setting up of the reward and welfare funds, being equal to the entire branch’s three months’ average actually paid wages.

3. Deduction of capital for investment in the construction of material foundations of the whole system under the projects approved by competent authorities.

4. The remainder shall be supplemented to the insurance funds.

Chapter VI

IMPLEMENTATION PROVISIONS

Article 23.- The Finance Minister shall have the responsibility to guide the implementation of this Regulation.

Article 24.- The Managing Board and the general director of Vietnam Social Insurance shall have to implement this Decision.