Decree No. 85/2026/ND-CP on Supplementary Retirement Insurance
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Based on:85/2026/NĐ-CP - Government Official Gazette
This explanation was generated by AI and checked by an automated AI review, not by a human expert. It is not legal, tax or accounting advice and may contain errors. Check the official document before you rely on it.
On March 25, 2026, the Government issued Decree No. 85/2026/ND-CP on supplementary retirement insurance, implementing Article 127.3 of the 2024 Social Insurance Law (Law No. 41/2024/QH15). This creates a voluntary, employer-sponsored pension benefit scheme for employees who already participate in compulsory social insurance. Participation cannot be made a condition of hiring, contract renewal, or tied to bonus and performance policies, and contribution levels are freely negotiated between employer and employee. The Decree sets up an individual retirement account for each participating employee and governs the establishment, management, and investment of supplementary pension funds. Eligible investments include government bonds, bank deposits, listed stocks and bonds, and fund certificates, subject to concentration limits (for example, a minimum 40 percent allocation to government bonds for funds with net assets of 5 billion VND or more, and caps on exposure to a single issuer or related-party group). Asset custodians, supervisory banks, and individual account administrators each have defined licensing conditions and liability to compensate participants if valuation or investment errors occur. Employees may draw benefits monthly, as a lump sum, or a combination of both; early withdrawal before retirement age (outside force majeure cases such as death, terminal illness, or 81 percent or greater loss of working capacity) triggers a fee of up to 5 percent of the withdrawal amount. On tax treatment, employer contributions are deductible for corporate income tax purposes up to the limits set by CIT law, and employees receive personal income tax incentives on both contributions and payouts. The Decree also sets licensing conditions for pension fund management companies (minimum 5 years of fund management experience, at least 1,000 billion VND in assets under management, and licensed staff), plus grounds for license revocation such as dissolution, fraud, or repeated compliance violations. SME owners considering this benefit should note that it is a market-based product - the State does not guarantee investment returns or payout amounts. Note: the Cong Bao source text retrieved for this article is cut off mid-Article 40 (Chapter III); the final provisions of the Decree, including the effective date, were not present in the source text used to prepare this summary.
Overview
Decree No. 85/2026/ND-CP was issued by the Government on March 25, 2026, regulating supplementary retirement insurance under Article 127.3 of the 2024 Social Insurance Law (Law No. 41/2024/QH15). It also cites the Government Organization Law No. 63/2025/QH15 and the Law on Enterprises No. 59/2020/QH14 (as amended by Law No. 03/2022/QH15 and Law No. 76/2025/QH15). Published in Official Gazette (Cong Bao) No. 188, dated April 8, 2026.
Scope and applicability
The Decree does NOT cover: compulsory or voluntary social insurance, pension insurance products sold by insurance enterprises, or securities investment fund management activities in general. It applies to participating employees and employers, pension fund management enterprises, and related service providers (custodians, supervisors, account administrators).
Participation principles (Chapter II, Section 1)
- Only available to employees and employers already participating in compulsory social insurance.
- Participation is fully voluntary and cannot be made a condition of hiring, or tied to bonus or performance evaluation policies.
- Contribution levels are negotiated between employer and employee; any minimum service requirement for vesting employer contributions cannot exceed 5 years.
- Employer contributions vest immediately in cases of: death; cancer, paralysis, decompensated cirrhosis, severe tuberculosis, or AIDS; work capacity reduction of 81 percent or more, or severe disability; or foreign employees who lose Vietnamese residency or whose work permit expires without renewal.
- Employee rights include: stopping or pausing participation, personal income tax incentives, maintaining the account for up to 1 year (or transferring to another fund) after leaving a job or retiring, and designating a beneficiary.
- Employer rights include: deducting contributions when determining corporate income tax, and reclaiming unvested employer contributions if the employee does not meet the vesting conditions.
Fund establishment and management (Chapter II, Sections 2-3)
- Pension fund management enterprises must draft a supplementary retirement insurance program and a fund charter for each fund, covering investment objectives, contribution methods, rights/obligations, accounting principles, dispute resolution, and disclosure.
- Three mandatory service providers: (1) Asset custodian - must be a commercial bank licensed for securities custody; (2) Supervisory bank - a commercial bank or foreign bank branch licensed to perform supervisory functions; (3) Individual retirement account administrator - the Vietnam Securities Depository and Clearing Corporation, or a licensed banking, fund management, accounting, or auditing firm.
- Permitted investments: government bonds, treasury bills, local government or government-guaranteed bonds, commercial bank deposits (excluding banks under special control), bank bonds and certificates of deposit, listed stocks and bonds, and securities investment fund certificates.
- Portfolio limits: minimum 40 percent of net asset value in government bonds for funds with NAV of 5 billion VND or more; maximum 30 percent in listed securities; maximum 5 percent/10 percent exposure to a single issuer; maximum 30 percent in a related-ownership group of companies; maximum 20 percent in a single securities fund's certificates.
- Damage compensation: a minimum of 0.75 percent of the fund's net asset value must be paid if NAV or individual account values are miscalculated; service providers share joint liability.
Payouts (Chapter II, Section 4)
- Employees may choose monthly payments, a lump sum, or a combination.
- The State does not guarantee payout amounts; disputes are resolved through negotiation, mediation, arbitration, or Vietnamese courts.
- Early withdrawal before retirement age (outside force majeure cases) incurs a fee of up to 5 percent of the withdrawal value.
- Heirs receive the full account value upon an employee's death and must fulfill applicable tax obligations.
Disclosure and reporting (Chapter II, Section 5)
- Before signing a participation contract, the fund management enterprise must provide introductory materials including a prominent risk warning stating the product is NOT a State pension scheme, is NOT an insurance product, and returns are not guaranteed by the State.
- Monthly account statements must be sent to participants within 10 working days after month-end.
- Fund management enterprises must report to the Ministry of Finance quarterly and annually (within 3 months of period end), plus ad hoc reports when service providers change, the charter is amended, or an administrative penalty is imposed.
Licensing conditions for pension fund management enterprises (Chapter III)
- Must be a legally established Vietnamese enterprise licensed in fund management or life insurance.
- Fund management companies need at least 5 years of experience, a minimum of 1,000 billion VND in assets under management, and must already manage at least 2 public funds, including at least 1 bond fund.
- Life insurers must meet the conditions for offering pension insurance products under insurance business law.
- Staffing: at least 5 employees with 5 years of fund management experience, including at least 3 with a fund management practice certificate or CFA (or equivalent) credential.
- Licensing process: the Ministry of Finance reviews applications within 30 working days, consulting the Ministry of Home Affairs on provisions affecting employee rights.
- Grounds for license revocation include: dissolution or bankruptcy; loss of the underlying business license; fraudulent application information; failure to establish a fund within 2 years of licensing; 3 or more unremedied administrative penalties within a 2-year period; or suspension due to unresolved special control status.
Note on source completeness
The Cong Bao text retrieved to prepare this article is cut off mid-Article 40 (rights and obligations of pension fund management enterprises, Chapter III). Later content, including any Chapter IV and the implementation/effective-date provisions, was NOT present in the source text used and is therefore not reflected in this summary. The full official text should be checked before relying on this article for compliance purposes.