What Can Employees Expect from Their Retirement Pension After 30 Years of Social Insurance Contributions?

Ms. Phan Thi Dung, a worker at a packaging company in Tan Binh
Industrial Park, shared that she has been consistently contributing to
social insurance for 24 years. As she aspires to receive a pension, she
has never considered withdrawing her social insurance once. With over
four years left until her retirement age, she will have contributed
approximately 29 years to social insurance, almost reaching the maximum
ratio for pension entitlement. Yet, she still has concerns about her
golden years.

The reason for her worry is that the pension for employees in the
enterprise sector is calculated based on the average of their entire
social insurance contribution period. In the initial years of her
contribution, Ms. Dung’s social insurance contribution was very low,
less than VND 100,000, a significant disparity compared to her current
contribution base salary of over VND 6 million. Even with the maximum
entitlement ratio, her pension will still be relatively low due to the
averaging calculation.

Due to this, Ms. Dung does not have high expectations from her
pension. “In the years before retirement, I will try to save up. As for
the pension, I just hope that it will cover some basic needs such as
electricity, water, and a portion of my food expenses,” she said.

Similarly, Ms. Le Thi Hong Loc, a security guard at Long Hai Service
Joint Stock Company in Phu Nhuan District, has consistently contributed
to social insurance for 27 years and will retire in less than three
years. As she has a single-parent family and needs to take care of her
elderly mother, her economic burden remains significant even as she
nears retirement.

Therefore, Ms. Loc plans to continue working to earn a living and
support her mother as long as her health permits. While she appreciates
having a pension and lifelong health insurance thanks to her consistent
social insurance contributions, she still has concerns. “I understand
that my pension won’t be high because my social insurance contributions
were low in the initial years, but I hope it won’t be too far from the
regional minimum wage at that time to cover some basic needs,” she
expressed.

Mr. Le Dinh Quang, Deputy Head of the Policy-Law Department of the
Vietnam General Confederation of Labor, acknowledged that the Social
Insurance Law demonstrates a clear emphasis on diversity, flexibility,
and multilayered approaches. However, he pointed out that while the
contribution-benefit principle in the retirement policy is evident, the
sense of sharing is still lacking. This leads to disparities in pension
amounts among contributors, especially for direct laborers with low
social insurance contributions who often have to retire early and face
percentage deductions, resulting in very low pensions. Therefore, he
suggested that while respecting the contribution-benefit principle, there
is a need to introduce mechanisms to minimize these disparities.