Vietnam’s Social Insurance Agency aims to ensure citizens’ well-being through a comprehensive social security system.
According to Article 56 of the 2014 Social Insurance Law, from January 1, 2018, the monthly retirement pension for eligible employees is calculated as 45% of the average monthly social insurance contributions and corresponds to the years of social insurance contributions as follows:
a) For male employees retiring in 2018, the required number of years is 16; in 2019, it’s 17 years; in 2020, it’s 18 years; in 2021, it’s 19 years, and from 2022 onwards, it’s 20 years.
b) For female employees retiring from 2018 onwards, the required number of years is 15.
For every additional year of service, employees specified in points a and b of this article will receive an additional 2%; the maximum rate is 75% of the monthly salary used as the basis for social insurance contributions.
As per Articles 56 and 74 of the 2014 Social Insurance Law, the retirement pension for employees is determined by the following general formula:
Monthly retirement pension = Entitlement rate x Average monthly salary/income used as the basis for social insurance contributions
The average monthly salary used as the basis for social insurance contributions (for those participating in compulsory social insurance) or the average monthly income used as the basis for social insurance contributions (for those participating in voluntary social insurance) will depend on the employee’s monthly salary or income and will be multiplied by the corresponding price fluctuation coefficient.
Point b, c clause 2 Article 7 of Decree No. 115/2015/ND-CP and point b, c clause 2 Article 3 of Decree No. 134/2015/ND-CP both guide the calculation of the entitlement rate for retirement pensions for employees.
Accordingly, for female employees retiring from January 1, 2018, onwards, the monthly entitlement rate is calculated as 45% corresponding to 15 years of social insurance contributions. For each additional year of social insurance contribution, 2% is added; the maximum rate is 75%.
Thus, for a female employee retiring in 2024, if she has paid social insurance contributions for 28 years, she will receive a retirement pension with a rate of 71% of the monthly salary used as the basis for social insurance contributions.
As for male employees, from 2022 onwards, the monthly entitlement rate is calculated as 45% corresponding to 20 years of social insurance contributions. For each additional year of social insurance contribution, 2% is added; the maximum rate is 75%.
Therefore, for a male employee retiring in 2024, if he has paid social insurance contributions for 28 years, he will receive a retirement pension with a rate of 61% of the monthly salary used as the basis for social insurance contributions.
Groups that will receive a 15% increase in retirement pensions from July 2024
According to Decree No. 75/2024/ND-CP on adjusting retirement pensions, social insurance allowances, and monthly allowances, which was recently issued by the Government on June 30, 2024, from July 1, 2024, there will be a 15% increase in retirement pensions, social insurance allowances, and monthly allowances compared to the rates in June 2024 for the subjects specified in Clause 1, Article 1 of this Decree.
This 15% increase in retirement pensions from July 1, 2024, applies to the subjects mentioned in Article 1 of Decree No. 75/2024/ND-CP, including:
– Officials, civil servants, workers, employees (including those who voluntarily participate in social insurance and retire from the Farmers’ Social Insurance Fund); military personnel, public security personnel, and those working in cryptography who are currently receiving monthly retirement pensions.
– Commune-level officials (commune, ward, town) currently receiving monthly retirement pensions or allowances under Decision No. 130-CP and Decision No. 111-HDBT;
– People currently receiving monthly allowances for loss of labor capacity; monthly allowances for those who have reached retirement age at the time of cessation of loss of labor capacity allowance or those who have worked for at least 15 years but less than 20 years and have exceeded the time limit for receiving loss of labor capacity allowance;
– Rubber workers who are newly liberated and engaged in heavy, hazardous work but are now too old and weak to continue working.
– Military personnel, public security personnel, and those working in cryptography who participated in the resistance war against America to save the nation with less than 20 years of military service and have been discharged, returned to the locality, or left the service.
– Military personnel, public security personnel, and those working in cryptography who receive a salary equivalent to that of military and public security personnel and are currently receiving monthly allowances for participating in the war of resistance to protect the nation, performing international duties in Cambodia, and assisting Laos after April 30, 1975, and have been discharged, returned to the locality, or left the service.
This includes individuals with retirement pensions of less than VND 3.5 million per month.
– People currently receiving monthly allowances for work-related injuries or occupational diseases.
– People currently receiving monthly survivor benefits before January 1, 1995.
In addition, after the above-mentioned subjects receive the increased retirement pension, if the amount is still lower than VND 3.5 million per month, it will be further adjusted as follows:
– For those with a retirement pension of less than VND 3.2 million per month: an additional VND 300,000 per month.
– For those with a retirement pension of VND 3.2 million to less than VND 3.5 million per month: an additional amount corresponding to VND 3.5 million per month.
The adjusted retirement pension amount mentioned above will serve as the basis for further adjustments in subsequent periods.
How many years do workers have to contribute to voluntary social insurance to receive a pension in 2024?
According to Article 3 of the 2014 Social Insurance Law, voluntary social insurance is a type of insurance organized by the State. Participants in voluntary social insurance have the right to choose the level and method of insurance payment that is suitable for themselves.
How much is the appropriate amount to increase pension?
According to the Minister of Labor, Invalids and Social Affairs, Dao Ngoc Dung, salary reform must go hand in hand with adjusting pension policies in a balanced and harmonious manner, to ensure that retired individuals do not face difficulties or disadvantages after the reform.
Is the pension from 1/7/2024 surpassing the previous pension?
In recent days, the media has been reporting extensively on the increase in pension benefits starting from July 1, 2024. These articles have garnered significant attention from society, particularly those who retired prior to July 1, 2024.
How much will you receive for monthly pension after retiring in 2024 and contributing to social insurance for 25 years?
The provision in the Social Security Law of 2014, as amended by Article 1, Section 219 of the Labor Code of 2019, states that employees who have reached the eligible age and have contributed to the Social Security Fund for a minimum of 20 years are entitled to receive a pension.
Ministry of Finance proposes reviewing pension and subsidy increase levels.
The Ministry of Finance has suggested that the Ministry of Labor, Invalids and Social Affairs review the adjustment of pension and allowance levels due to exceeding the state budget estimate. The Ministry of Finance also proposed that the relevant department consider transferring funds from salary reform to increase pensions and allowances.
