Hanoi (VNS/VNA) - About 90 percent of social insurance funds arecurrently invested in government bonds (G-bonds), Dao Viet Anh, Deputy GeneralDirector of the Vietnam Social Security (VSS), said at a seminar last week.

The annual average investment interest rate of the entire social insurance fundin 2017 was 7.25 percent.

Anh said that when investing, the VSS always considered factors such as market,liquidity and especially the safety of the fund.

The social insurance fund invested in G-bonds helped secure the fund whileraising capital for development investment, contributing to the restructuringof public debt and overspending, Anh said.

The participation of the social insurance fund in the government bond marketalso significantly increased the term of government bonds. If in the past,the longest term for G-bonds was just ten years, now there are 30-year G-bonds.

This, Anh said, has led to an increase in the average maturity of G-bonds,which helped reduce pressure on the repayment of government debt.

"We did a good job in investment efficiency of the social insurance fundand contribute to socio-economic development," he said.

The main investment formsof the social insurance fund are the purchase of G-bonds, the loans for Statebudget and deposits at commercial banks.

According to a report by the VSS, the accumulated fund investment till the endof 2017 reached nearly 610 trillion VND (26.4 billion USD), 2.6 times higherthan that in 2012 of nearly 234 trillion VND. Profit earned frominvestment in the period 2013-2017 reached nearly 150 trillion VND, of whichthe profit in 2017 was 37.5 trillion VND, doubling that in 2012, which wasnearly 19 trillion VND.

The report said the VSS’ investment practice was in accordance with Governmentregulations. The investment structure was shifted towards safetyorientation, gradually increasing the proportion of investment in governmentbonds. The size of the fund’s investment and the profit from investmentboth increased annually.

However, according to this report, the investment activities of the socialinsurance fund had not diversified, mainly through the purchase of G-bonds withlong-term periods and through short-term deposits at commercial banks. The fundhad not yet focused on other forms of investment with higher profitability.

Moreover, the overspending of the health insurance fund had increased. Baddebts and evasion in health insurance and social insurance still occurred inmany localities. The number of enterprises owing social insurance andhealth insurance remained high and the amount of debt was still large and noappropriate handling measures had been put in place.-VNS/VNA