A voluntary pension fund will be set up soon, the Ministry of Planning and Investment has said.

The Government has ordered the Ministry of Finance (MoF), the StateBank of Vietnam and other related agencies to take measures to developthe capital market, with priority given to establishing a VoluntaryRetirement Pension Fund.

According to MoF, it has drawn up a blueprint for the fund and submitted to the Cabinet for consideration.

If approved, it would not only help improve the social security systembut also the financial market and, especially, increase the number aswell as quality of giant investors, also known as elephants.

Several key principles to ensure the fund's effectiveness as well assafety have to be drawn up – like the contribution ratios by employersand employees, investment options and oversight of the fund, andbenefits that contributors can enjoy.

Phan Thi Thu Hien, DeputyDirector of MoF's Banking and Financial Institution Department, said theministry is already working on a decree to guide the working of thepension fund so that the fund can be operated efficiently as soon as itis approved.

The decree will spell out regulations on investments and the benefits and obligations of participants.

According to the State Securities Commission, there are around 10 mutual funds in the stock markets.

More funds including some bond funds are set to be established,providing safe opportunities to invest in the pension fund corpus, itsaid.

Analysts said the early establishment of the pension fundwould benefit the mutual funds sector, thus giving a boost to thecapital market and securities market in terms of both depth and quality.

They called for tax breaks for the fund during its start-up period to ensure it has a smooth beginning.-VNA