Voluntary Supplemental Pension Fund Investment

Recently, the Ministry of Finance issued Circular 86/2017/TT-BTC to guide certain provisions of Decree 88/2016/ND-CP of the Government of Vietnam on the voluntary supplementary retirement program. This Circular took effect from October 1, 2017.

The Circular clearly stipulates the investment activities of the voluntary supplementary retirement fund. Accordingly, the investment activities of the retirement fund are to be carried out as per the provisions of Article 20 of Decree 88/2016/ND-CP, adhering to legal regulations, taking responsibility for investment activities, ensuring safety and efficiency, and aligning with the objectives and investment policies of the retirement fund as specified in the fund's charter.

Moreover, the retirement fund is permitted to invest no more than 20% of the total asset value of the fund in the certificates of a securities investment fund. In cases where investments are made in the certificates of securities investment funds managed by the enterprise that manages the retirement fund, the retirement fund management enterprise is allowed to charge a management fee only once.

Based on the financial market situation and investment activities of the retirement fund, the Ministry of Finance may adjust the list and investment limits as stipulated.

Monthly, the retirement fund management enterprise is responsible for determining the net asset value of the retirement fund and assessing the value of individual retirement accounts as prescribed.

Should the retirement fund management enterprise miscalculate the net asset value of the retirement fund, miscalculate the value of individual retirement accounts, and thereby cause actual damage to fund participants, the retirement fund management enterprise must compensate for the damages to the fund participants.

The level of mistakes requiring compensation is regulated according to the procedures for determining the net asset value of the retirement fund and assessing the value of individual retirement accounts, but shall not be less than 0.75% of the net asset value of the fund.

Source: Bao Nguoi Dong Hanh

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