CIRCULAR

ON GUIDELINES FOR FORMULATION OF AGREEMENT ON PARTICIPATION IN PENSION ADDITIONAL VOLUNTARY CONTRIBUTION SCHEME AT ENTERPRISES

Pursuant to Government's Decree No. 14/2017/ND-CP dated February 17, 2017 defining the functions, tasks, entitlements and organizational structure of the Ministry of Labor, War Invalids and Social Affairs;

Pursuant to Government's Decree No. 88/2016/ND-CP dated July 1, 2016 on pension additional voluntary contribution scheme;

At the request of the Director of Department of Social Security,

The Minister of Labor, War Invalids and Social Affairs promulgates a Circular on guidelines for formulation of agreement on participation in pension additional voluntary contribution scheme at enterprises.

Chapter I

GENERAL PROVISIONS

Article 1. Scope

This Circular provides guidelines for formulation of agreement on participation in pension additional voluntary contribution scheme prescribed in Government's Decree No. 88/2016/ND-CP dated July 1, 2016 on pension additional voluntary contribution scheme (hereinafter referred to as Decree No. 88/2016/ND-CP).

Article 2. Regulated entities

1. Employees aged 15 or older who have worked under labor contracts with employers.

2. Employers which are enterprises, agencies, organizations, cooperatives, household businesses, persons hiring and employing employees under labor contracts.

3. Organizations and individuals relevant to pension additional voluntary contribution schemes (hereinafter referred to as AVC schemes).

Chapter II

FORMULATING AND SIGNING AGREEMENTS

Article 3. Agreement on participation in AVC scheme

1. Agreement on participation in AVC scheme (hereinafter referred to as Agreement) means a written agreement between the employee and the employer on contribution responsibility, rights and obligations of each participant in the AVC scheme.

2. Agreement must be made in 3 copies, 1 copy is kept by the employee, 1 copy is kept by the employer, and 1 copy is kept by the pension fund management company.

Article 4. Rules for concluding Agreement

1. Voluntariness, equality, amicability, cooperation, and truthfulness.

2. Free to conclude Agreement which does not go against the law, collective bargaining agreement and social ethics.

Article 5. Content of Agreement

An Agreement of AVC scheme shall be made as prescribed in Point b Clause 2 Article 8 of Decree No. 88/2016/ND-CP, which contains the following:

1. Name of the AVC scheme which the employee chooses to participate in as prescribed in Article 6 hereof.

2. Basic information of the AVC scheme as prescribed in Article 7 hereof.

3. Validity period of the Agreement as prescribed in Article 8 hereof.

4. Employer’s contributions, contribution frequency and duration prescribed in Article 9 hereof.

5. Employee’s contributions, contribution frequency, duration and method (if the employee jointly making contribution with the employer) prescribed in Article 10 hereof.

6. Employee’s rights and obligations upon participation in AVC scheme prescribed in Article 11 and Article 12 hereof.

7. Employer’s rights and obligations upon participation in AVC scheme for their employees’ benefits prescribed in Article 13 and Article 14 hereof.

8. Matters that the employee authorizes the employer prescribed in Article 15 hereof.

9. Process of changing contents in the Agreement (if any).

10. Cases of temporary suspension or suspension from participation in the AVC scheme prescribed in Article 16 and Article 17 hereof.

11. Other agreements between the employee and the employer not in contrary to laws and regulations (if any).

Article 6. Name of AVC scheme

1. Based on the labor management need and financial resources, the employer may build up single or multiple AVC scheme(s) to make contributions to the pension fund for employees.

2. An employee shall choose to participate in an AVC scheme that he/she deems that he/she is eligible for and wishes to participate in.

Article 7. Basic information of the AVC scheme

Basic information of the AVC scheme in the Agreement includes:

1. Eligible entities and conditions for participation in the AVC scheme.

2. Employer’s commitment on minimum contribution rate when the employee participates in the AVC scheme.

3. The pension fund management company chosen by the employer.

4. Beneficiary’s eligibility criteria, plans for payment from pension fund.

Article 8. Validity period of Agreement

1. When concluding an Agreement, the employee and the employer must specify the validity period of the Agreement, start time and end time of the AVC scheme.

2. The end time of the AVC scheme cannot come after the termination date of the labor contract between the employer and the employee.

Article 9. Employer’s contributions, contribution frequency and duration

The employer shall determine its specific contributions, contribution frequency and duration as follows:

1. Contribution is determined as an absolute amount or a percentage on the employee’s salary. The employer’s contribution may not less than the minimum contribution prescribed in Clause 2 Article 7 hereof.

2. Contribution frequency may be once a month, once every two months, once every three months, or another frequency at the employer’s discretion in conformity with its capacity and need.

3. Contribution duration shall be mutually agreed by the employer and the employee in conformity with the AVC scheme which is built up by the employer and chosen by the employee. The contribution duration shall be specified in the agreement.

Article 10. Employee’s contribution rate, frequency, duration and method

If an employee jointly making contributions to the pension fund, his/her contribution rate, frequency, duration and method shall be determined as follows:

1. Contribution amount is determined as an absolute amount or a percentage on the employee’s salary.

2. Contribution frequency may be once a month, once every two months, once every three months, or another frequency at the employee’s discretion in conformity with its capacity and need.

3. Contribution duration shall be mutually agreed by the employer and the employee in conformity with the AVC scheme which is built up by the employer and chosen by the employee. The contribution duration shall be specified in the agreement.

4. The employee makes contributions to the pension fund through the employer by having the employer withhold his/her contribution from his/her monthly salary.0}

Article 11. Rights of employees

When an employee enters into an Agreement, he/she shall have the rights to:

1. Decide to participate or stop participating in the AVC scheme.

2. Decide his/her contribution rate, frequency, duration, method and any change (if any) in conformity with the AVC scheme which is established by the employer and chosen to participate by the employee.

3. Enjoy all benefits prescribed in the AVC scheme in which he/she participates, contents in the Agreement and in accordance with laws and regulations.

4. Come into an agreement with the employer to change the contents of the Agreement or request the employer to fulfill contents as committed in the Agreement and the AVC scheme.

5. Receive the employer’s contribution and the investment from this contribution in a case where the employer unilaterally stops participating in the AVC scheme.

6. Unilaterally terminate execution of the Agreement.

7. Other rights as agreed upon with the employer and as per the law.

Article 12. Obligations of employees

1. Make contributions as committed in the Agreement.

2. Notify the employer at least 5 working days of any change to the contribution rate, frequency, duration and method; at least 3 working days of the temporary suspension or suspension from execution of the Agreement.

3. Other obligations as agreed upon with the employer and as per the law.

Article 13. Rights of employers

1. Decide their part of contribution rate, frequency, duration.

2. Come into agreement with the employee on change to contents of the Agreement in conjunction with their obligations and duties.

3. Receive their contributions for the employee and investment from these contributions in a case prescribed in the AVC scheme and the Agreement.

4. Unilaterally terminate the Agreement in a case where the employee commits legal violations as to the AVC scheme or regulations on AVC scheme of the enterprise.

5. Other rights as agreed upon with the employee and as per the law.

Article 14. Obligations of employers

1. Make contributions according to the agreed contribution rate, frequency and duration.

2. Abide by and perform commitment in the Agreement and prescribed by law.

3. Pay the contribution withheld from the employee’s salary (if any).

4. Follow procedures with the pension fund management company in order for the employee to enjoy or forward the contribution to the fund.

5. Other obligations as agreed upon with the employee and as per the law.

Article 15. Employee’s authorization

The employee shall authorize the employer to perform the following tasks:

1. Enter into an agreement on pension fund participation with a pension fund management company.

2. Choose investment plans as provided in the charter of pension fund.

3. Pay related fees and costs as provided in the charter of pension fund.

Article 16. Cases of temporary suspension from participation

The employee and the employer reach an agreement on temporary suspension from participation in the AVC scheme in case of one of the following cases:

1. The employee and the employer reach an agreement on suspension from the Agreement.

2. The employee delays the labor contract.

Article 17. Cases of suspension from participation

The employee and the employer reach an agreement on suspension from participation in the AVC scheme in case of one of the following cases:

1. The Agreement expires but they do not agree to extend or re-sign the Agreement.

2. The employee and the employer agree to suspend from participation.

3. The employee unilaterally terminates the execution of the Agreement.

4. The employer unilaterally terminates the execution of the Agreement.

5. The labor contract between the employee and the employer terminates before the expiry of the Agreement.

Chapter III

IMPLEMENTATION

Article 18. Entry into force

This Circular comes into force as of December 15, 2018.

Article 19. Implementation

1. Employers, employees, pension fund management companies and relevant entities shall implement this Circular.

2. Difficulties that arise during the implementation of this Circular should be reported to the Ministry of Labor, War Invalids and Social Affairs for consideration./.