Pension Benefits According to the 2014 Social Insurance Law

There is a difference in pension benefits between employees who retire in 2024 after contributing to social insurance for 25 years and those who retire after July 1, 2025, which has sparked curiosity among many.

According to Article 56 of the 2014 Law, from January 1, 2018, the monthly pension of employees who meet the requirements is calculated as 45% of the average monthly income on which social insurance contributions are based, and it corresponds to the number of years of social insurance contributions as follows: 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. As for female employees, the requirement from 2018 onwards is 15 years. For every additional year, the employees specified in points a and b of this article will have their pension increased by 2%, up to a maximum of 75% of the monthly salary on which social insurance contributions are based.

Additionally, according to Decree No. 115/2015/ND-CP and Decree No. 134/2015/ND-CP, for female employees retiring from January 1, 2018, onwards, the monthly pension rate is calculated as 45% corresponding to 15 years of social insurance contributions. After that, for each additional year of contribution, 2% is added, up to a maximum of 75%.

Those who have contributed to social insurance for 25 years will receive a monthly pension of up to 75% of their monthly salary on which social insurance contributions are based.

Therefore, for female employees retiring in 2024 with 25 years of social insurance contributions, the pension rate will be 65% of the monthly salary on which social insurance contributions are based.

As for male employees, the monthly pension rate is calculated as 45% corresponding to 20 years of social insurance contributions. After that, for each additional year of contribution, 2% is added, up to a maximum of 75%.

Consequently, for male employees retiring in 2024 with 25 years of social insurance contributions, the pension rate will be 55% of the monthly salary on which social insurance contributions are based.

Calculation Method According to the 2024 Social Insurance Law

Article 66 of the 2024 Law (effective from July 1, 2025) stipulates the following regarding the monthly pension amount:

1. The monthly pension of eligible individuals as specified in Article 64 of this Law shall be calculated as follows:

a) For female laborers: 45% of the average income on which social insurance contributions are based according to Article 72 of this Law, corresponding to 15 years of contributions. For each additional year, 2% is added, up to a maximum of 75%.

b) For male laborers: 45% of the average income on which social insurance contributions are based according to Article 72 of this Law, corresponding to 20 years of contributions. For each additional year, 2% is added, up to a maximum of 75%.

In the case of male laborers with a contribution period of between 15 and less than 20 years, the monthly pension shall be 40% of the average income on which social insurance contributions are based according to Article 72 of this Law, corresponding to 15 years of contributions. For each additional year, 1% is added.

According to Article 99 of the 2024 Law, the monthly pension amount for eligible individuals is as follows:

a) For female laborers: 45% of the average income on which social insurance contributions are based according to Article 104 of this Law, corresponding to 15 years of contributions. For each additional year, 2% is added, up to a maximum of 75%.

b) For male laborers: 45% of the average income on which social insurance contributions are based according to Article 104 of this Law, corresponding to 20 years of contributions. For each additional year, 2% is added, up to a maximum of 75%.

The 2024 Social Insurance Law increases the opportunity for pension entitlement by reducing the minimum number of years of social insurance contributions from 20 to 15. (Image: GVP)

In the case of male laborers with a contribution period of between 15 and less than 20 years, the monthly pension shall be 40% of the average income on which social insurance contributions are based according to Article 104 of this Law, corresponding to 15 years of contributions. For each additional year, 1% is added.

Therefore, from July 1, 2025, employees who have contributed to social insurance for 25 years will receive the following pension benefits:

For female laborers: The monthly pension amount is 45% of the average income on which social insurance contributions are based, corresponding to 15 years of contributions. For each subsequent year, an additional 2% is added until the maximum of 75% is reached. Thus, female laborers with 25 years of contributions will receive a pension equivalent to 65% of their average income.

For male laborers: The monthly pension amount is 45% of the average income on which social insurance contributions are based, corresponding to 20 years of contributions. Thus, male laborers with 25 years of contributions will receive a pension equivalent to 55% of their average income.

Essentially, the 2024 Social Insurance Law introduces a significant change by increasing the opportunity for pension entitlement for participants by reducing the minimum number of years of social insurance contributions required from 20 years to 15 years.

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