There will be adjustments to pensions
The resolution of the National Assembly on the state budget estimate for 2024 mentions the reform of salaries. The resolution states that from July 1, 2024, comprehensive salary policy reforms will be implemented in accordance with Resolution No. 27-NQ/TW, adjusting pensions, social security allowances, monthly allowances, preferential allowances for people with meritorious services and some social security policies linked to basic salaries.
Pension and social security allowance payment in Ngoc Khanh Ward, Ba Dinh District, Hanoi. Photo: XC
The implementation of salary policy reforms will be funded from the accumulated salary reforms of the central budget, local budgets, and partly allocated in the state budget expenditure estimate.
Therefore, pensions will be adjusted from July 1, 2024. However, the specific adjustment is pending government regulations.
The latest pension increase was on July 1, 2023, according to Decree 42/2023/NĐ-CP with an increase of 12.5% or 20.8% depending on specific subjects.
Increasing regional minimum wages contributing to pension increase
The pension calculation formula shows that adjusting social insurance contribution wages will contribute to increasing the average monthly social insurance contribution amount, thereby contributing to increasing the pension for workers.
From July 1, 2024, it is expected that the minimum wage for workers will be increased by an additional 6% compared to the current level.
With a minimum wage adjustment of 6%, the minimum regional wage will increase from VND 200,000 to VND 280,000 depending on the region, in which, region 1 will increase to VND 4.96 million; region 2 is VND 4.41 million; region 3 is VND 3.86 million; and region 4 is VND 3.45 million.
In addition, salary policy reforms according to Resolution No. 27-NQ/TW of the 7th Central Conference (12th term) will be implemented from July 1, 2024.
Therefore, adjusting the minimum regional wage and salary policies will help increase the social insurance contribution wages, thereby contributing to the pension increase for workers.
Adjustments to salaries and monthly incomes already contributed to social insurance
The Ministry of Labor – Invalids and Social Affairs has issued a circular regulating the adjustment of salaries and monthly incomes already contributed to social insurance. The provisions of the circular apply from January 1, 2024.
According to the circular, the subjects to adjust salaries already contributed to social insurance include employees subject to salary regimes regulated by the State and participating in social insurance from January 1, 2016, or later, receiving social insurance benefits once or being died and their relatives receiving funerary allowances once from January 1, 2024, to December 31, 2024.
In addition, employees who contribute to social insurance under salary regimes decided by the employers, receive pensions, and one-off allowances upon retirement, or receive social insurance benefits once or their relatives receive funerary allowances once from January 1, 2024, to December 31, 2024.
The subjects to adjust monthly incomes already contributed to social insurance as regulated are voluntary social insurance participants who receive pensions, one-off allowances upon retirement, or receive social insurance benefits once or their relatives receive funerary allowances once from January 1, 2024, to December 31, 2024.
With the adjustment of monthly social insurance contributions from January 1, 2024, the average monthly social insurance contribution amount will increase. In addition, according to the mentioned salary calculation formula, the pension amount will also increase.
This increase aims to ensure that pensions do not lose value compared to the cost of living. This circular takes effect from February 15, 2024; the provisions of this circular apply from January 1, 2024.
