Mandatory Social Insurance vs Supplementary Retirement Insurance in Vietnam: Must Employers Pay Both?

The short answer: NO. Compulsory social insurance is a legal obligation every employer must fulfill; supplementary retirement insurance is a voluntary scheme — companies are not required to join or contribute. However, the line between “voluntary” and “mandatory” can shift in situations many companies do not expect. This article distinguishes the two regimes and highlights key new points from Decree 85/2026/ND-CP.

Compulsory social insurance vs supplementary retirement insurance

What is new: Decree 85/2026/ND-CP on supplementary retirement insurance

On 25/3/2026, the Government issued Decree 85/2026/ND-CP on supplementary retirement insurance, effective 10/5/2026. Article 44 provides that Decree 85/2026 fully replaces Decree 88/2016/ND-CP on voluntary supplementary retirement programs. It is now the sole current instrument governing this area — all bases under Decree 88/2016 have expired.

The voluntary nature is affirmed in clause 1 Article 5 of Decree 85/2026:

• Eligible persons may voluntarily participate in supplementary retirement insurance implemented by retirement fund management companies through employers;
• Participation is not a mandatory condition for recruitment, conclusion or extension of employment contracts; employers must not coerce, discriminate against, or obstruct the lawful rights and interests of employees through participation in supplementary retirement insurance;
• Contribution rates are agreed on a voluntary basis between employer and employee.

How it works: each participant holds an individual retirement account; the company contributes voluntarily under its committed benefit policy, with funds managed and invested by a licensed retirement fund management company.

When does “voluntary” become “mandatory”?

This is the point many companies overlook. Supplementary retirement insurance is voluntary under the law, but once a company has committed to contribute for its employees in an employment contract, collective labor agreement or published benefit policy, that commitment becomes an enforceable obligation.

In other words: it is not a statutory obligation imposed by the state, but a contractual obligation — a promise made must be kept. Breaching the commitment can trigger labor disputes, employee complaints and compensation liability under the agreement. Companies should therefore carefully assess long-term financial capacity and draft commitment clauses tightly and clearly before adding supplementary retirement to their benefit policies.

Supplementary retirement cannot replace compulsory social insurance

One misconception to eliminate: however generous a company supplementary retirement contributions are, they do not replace the compulsory social insurance obligation. The two regimes exist in parallel, independently:

• Compulsory social insurance must still be paid fully and on time for all covered persons (Article 2 Social Insurance Law 41/2024), at the rates in Articles 33 and 34 and under Decree 158/2025/ND-CP;
• Late payment or evasion of compulsory social insurance still triggers arrears collection (full payment + 0.03%/day under Articles 40 and 41 of Law 41/2024) and administrative penalties under Articles 43 and 44 of Decree 283/2026/ND-CP (effective 10/9/2026, replacing Decree 12/2022/ND-CP).

Notes for building a benefit policy

1. State the voluntary nature clearly in all internal documents and agreements with employees; do not link supplementary retirement participation to recruitment conditions, performance reviews or bonuses.
2. Assess financial capacity: supplementary retirement commitments are long-term, tied to each employee — calculate before promising.
3. Draft the participation agreement in line with Decree 85/2026, specifying contribution rates and conditions for enjoying the employer contribution portion.
4. Prioritize compulsory social insurance compliance first: do not neglect the mandatory obligation while investing in voluntary benefits — arrears collection and penalties for compulsory social insurance are severe.

Conclusion

Companies are not required to pay both compulsory social insurance and supplementary retirement insurance — only compulsory social insurance is a legal obligation. Supplementary retirement insurance is a voluntary benefit tool under Decree 85/2026/ND-CP (effective 10/5/2026, replacing Decree 88/2016), helping companies attract and retain talent. But once committed in a contract or benefit policy, “voluntary” becomes a contractual obligation the company must honor. And in all cases, supplementary retirement never replaces compulsory social insurance.

Legal sources

• Social Insurance Law 41/2024/QH15 (effective 01/7/2025, replacing Law 58/2014/QH13): Article 2; Article 33; Article 34; Article 40; Article 41.
• Decree 158/2025/ND-CP guiding compulsory social insurance (effective 01/7/2025).
• Decree 85/2026/ND-CP on supplementary retirement insurance (issued 25/3/2026, effective 10/5/2026, fully replacing Decree 88/2016/ND-CP): Article 4; Article 5; Article 44.
• Decree 283/2026/ND-CP on administrative penalties in labor and social insurance (effective 10/9/2026, replacing Decree 12/2022/ND-CP): Article 43; Article 44.

Is your company considering a supplementary retirement benefit program for its employees? Reach us via the Contact page of FLAT Law Firm for advice on designing benefit programs, drafting participation agreements, and ensuring full compliance with compulsory social insurance obligations.

The legal content of this article is reviewed by FLAT’s AI Legal Council and submitted to the owner for approval; it is not an opinion of a licensed lawyer and does not replace legal advice for specific cases.

For reference only, not legal advice.