Lao People’s Democratic Republic

Valuation of the National Social Security Fund carried out to strengthen financial sustainability and shock responsiveness

The actuarial valuation, which included assessing options to improve the Fund’s long-term sustainability and the impact of COVID-19 payouts, will provide a valuable evidence base and findings to inform the forthcoming (2024) amendment of the Social Security Law.

Actuarial Working Committee established, comprising 12 permanent members, including 8 women

Technical trainings were carried out to strengthen Lao Social Security Organisation’s (LSSO) and National Health Insurance Bureau’s (NHIB) data management, data analysis and planning capacities.

Evidence-based policy recommendations validated by Government on how to extend social protection coverage to informal workers

The policy recommendations were based on quantitative analysis and field work to better understand the characteristics of informal workers, households and small and medium-sized enterprises. The findings were presented at two multi-stakeholder workshops and will also inform the amendment of the Social Security Law in 2024.

Around 70% of the Lao population lives in rural areas, usually with low and irregular incomes, poor working conditions, and limited access to social protection. High informality presents a significant administrative and financial challenge for extending social insurance coverage. The country’s economy is highly dependent on migrant remittances, which were significantly impacted by the COVID-19 outbreaks, with many families being pushed further into poverty. Women were affected to a greater extent, as they are more represented among the poor, vulnerable, and in some of the hardest-hit sectors such as tourism, retail, manufacturing, and garments.

The Government of Lao PDR recognises the need to effectively address these challenges to tackle the persistent disparities based on gender, age, location, ethnicity, language, educational attainment, disability, and socioeconomic status. Accordingly, a National Social Protection Strategy was adopted in 2020, to be overseen by the National Social Protection Commission created in 2021.

The project supported the government’s efforts to establish a shock-responsive and sustainable social protection system to better respond to future crises. The actions contributed to extending coverage to unregistered workers and small and medium-sized enterprises through a nuanced and evidence-based design of the social security scheme and administrative systems, improved financial sustainability of the National Social Security Fund and analysis of the provisions in the Social Security Law. 

Key Results achieved

  • Financial management and planning capacity of the Actuarial Committee of Lao PDR, comprising 12 permanent members including 8 women, strengthened.
  • Two capacity building exercises (technical trainings) organised in the context of the actuarial valuation.
  • Actuarial analysis of the National Social Security Fund initiated, with the ultimate objective of providing inputs to the amendment of the Social Security Law at a later stage.

Resources

Events

  • Workshop on the Extension of social security coverage in Lao PDR, 15-17 February 2023.
  • International Seminar of the ASEAN Social Security Association (ASSA) on “Partnering and Mobilising Social Justice for Sustainable Financing of Social Security Systems and towards Universal Social Protection”, 23-24 November 2022: press release.
  • Technical training for the Actuarial Committee of Lao PDR on “Internal actuarial resources and understanding the social security scheme and the actuarial model”, 30 June 2022.
  • Technical training for the Actuarial Committee of Lao PDR on “drawing up an actuarial data request, data sources, delivery of data, controlling and checking the data, and inter-valuation period and experience”, 30-31 August 2022.
  • Technical training for the Actuarial Committee of Lao PDR on “Setting appropriate assumptions, key results of the actuarial valuation, scenarios and sensitivity analysis, and the actuarial valuation report”, 24-25 January 2023.

Project partners

The project will be jointly implemented by the ILO and the Lao Social Security Organisation (LSSO) of the Ministry of Labour and Social Welfare.

Contacts

Loveleen DE, Programme Manager, ILO Country Office for Thailand, Cambodia, and Lao PDR – del@ilo.org

Nuno Cunha, Sr Technical Specialist, Social Protection, ILO Country Office for Thailand, Cambodia, and Lao PDR – cunhan@ilo.org

Webpage: https://socialprotection-pfm.org/partner-countries/lao-pdr/

 

Understanding informality and expanding social security coverage in the Lao Peoples Democratic Republic

How to expand social security coverage in Lao People’s Democratic Republic, March 2023

 

Workshop on Extension of social security coverage in Lao PDR, February 2023

Actuarial valuation and social security in Lao PDR, February 2023

ASSA International Seminar, Lao PDR, November 2022

ASSA International Seminar, Lao PDR, November 2022 (click on the image to see the photo gallery)

Rural workers returning home after work in Van Vieng, Laos (2020)

Fisher in Vientiane, Laos (2021) 

Workers in the informal economy at their food stalls at a night market in Vientiane, Laos (2019)