The lowest pension in Ho Chi Minh City is currently 2.34 million VND/month (equal to the basic salary). In contrast, the highest pensioner, Mr. P.P.N.T., receives over 140 million VND/month, 60 times higher than the lowest pension in the city and the highest in Vietnam.
This significant difference is due to the pension adjustment coefficient, which is applied when an individual reaches retirement age. The coefficient adjusts for inflation and is multiplied by the pension amount. Additionally, the pension is based on the individual’s salary from 20 years ago, which has also increased by a factor of 3-4.
Vietnam has adjusted pensions 23 times from 1995 to 2023.
From 1995 to 2023, Vietnam adjusted pensions 23 times. As a result, pensions have increased by 21 to 26 times compared to the 1995 levels.
For example, Mr. P.P.N.T.’s pension has increased from over 87.3 million VND/month in 2015 to more than 140 million VND/month currently. This significant increase is due to six pension adjustments since his retirement.
According to the latest regulations, from July 1, 2024, there will be a 15% increase in pensions, social insurance allowances, and monthly allowances for individuals who retired before that date.
Additionally, those receiving less than 3.5 million VND/month after the 15% adjustment will be eligible for further increases as follows:
– An additional 300,000 VND/month for individuals with a monthly pension of less than 3.2 million VND.
– An increase to 3.5 million VND/month for individuals with a monthly pension between 3.2 million VND and less than 3.5 million VND.
“A Proposal to Increase Social Insurance Allowance to 750,000 VND per Month”
According to the Ministry of Labour, Invalids and Social Affairs, 14 provinces and cities have increased social assistance levels beyond the prescribed regulations since the beginning of the year. To keep pace with the upcoming salary reform policies, the Ministry is proposing to raise the monthly allowance standard from 360,000 VND to 500,000 VND or 750,000 VND.
Proposed 15% pension increase, what does the Ministry of Finance say?
The Ministry of Finance has announced that the current fiscal balance conditions are challenging for the central budget, with limited resources for adjusting pensions and some social welfare subsidies.
