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Vietnam backtracks on unpopular pension changes

pension fundVietnam’s rubber stamp parliament on Monday reversed controversial changes to state pension laws which triggered mass protests at factories earlier this year, state media reported, a rare policy climbdown in the authoritarian state.

New changes to the legislation were passed Monday afternoon by the communist country’s National Assembly, state-run Vietnam Television (VTV) reported, allowing workers to receive a lump sum social insurance payment when they leave a company.

The government had previously insisted payouts would be delayed until the retirement age of 60 for men and 55 for women — a move that was aimed at bolstering state pensions schemes but prompted a sharp backlash from workers.

Tens of thousands of employees at both local and foreign-owned factories in southern Vietnam organised mass protests and strikes over the pension law changes in March this year.

Demonstrators said they needed payment immediately on leaving a job and voiced doubts that the money would be there in future, state media reported at the time.

The strikes and protests were eventually called off after the government promised to reassess the legislation.

The changes approved Monday mean that workers can now choose between taking a lump-sum payment or leaving their social insurance payments in the government system to later be paid out in the form of a pension.

Strikes and protests have become a more frequent occurrence in communist Vietnam, where the authoritarian government tightly controls all large public gatherings and protests.

Although there are many unions, they are all linked to the ruling communist party, which experts say has led to an erosion of trust.

Discontent over low pay and working conditions has erupted violently in the past, although most strikes and protests tend to focus on company practices rather than government policy.

Last year, after Beijing moved an oil rig into waters claimed by Vietnam, a wave of anti-China sentiment snowballed into violent protests which saw foreign-investment-backed factories in industrial zones in the south and centre of the country looted and burned to the ground.

At least two Chinese workers died and more than 100 other people were injured during the unrest. The government has since paid compensation to foreign investors.

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