HCMC – Vietnam’s supplementary pension fund system is expected to become a key source of medium- and long-term investment capital totaling billions of U.S. dollars.
The emergence of this source of capital, accumulated over decades, is projected to fundamentally reshape the market by reducing excessive reliance on short-term retail flows and supporting more sustainable growth in Vietnam’s domestic bond market.
The outlook was highlighted at a conference on implementing Decree No. 85/2026/ND-CP on supplementary pension insurance, organized by the Ministry of Finance in HCMC on May 22. The decree took effect on May 10.
After a decade of pilot operations, the new regulatory framework marks the Government’s effort to standardize the model, strengthen professionalism and expand the scale of Vietnam’s voluntary pension market.
As of the end of 2025, the market remained in its early stages, with four licensed fund management companies operating seven supplementary pension funds. However, total assets under management (AUM) had reached more than VND2.21 trillion, representing a 21-fold increase compared with 2021 and attracting nearly 28,600 participating workers.
From a macroeconomic perspective, experts said the implementation of Decree No. 85 goes beyond strengthening Vietnam’s multi-tier social security system amid population aging. They described it as a step toward building long-term financial infrastructure and channeling capital more efficiently.
A key feature of the decree is the establishment of a multi-layer supervisory mechanism aimed at containing systemic risks, while encouraging investment portfolios that incorporate safety standards and environmental, social and governance (ESG) criteria.
For defined-contribution pension funds, long-term returns depend heavily on controlling operating costs. According to international experience cited from the World Bank, preserving a minimum real return of 3% annually, enough to turn one unit of contribution into four units over a 45-year investment cycle, requires a shift toward low-cost index funds with expense ratios below 0.3% of AUM to avoid eroding participants’ assets.
