According to the Ministry of Labor, Invalids and Social Affairs, the monthly pension of people who meet the retirement conditions is calculated according to Articles 64 and 65 of the Law on Social Insurance. The pension calculation method is applied according to Article 66 of this Law.

Maximum pension rate deducted

In the case of employees who have paid social insurance for many years (over 30 years for women, over 35 years for men), but are not yet of retirement age, their pension rate will still be deducted and they will not receive the maximum amount.

A specific example can be given as follows: Ms. A is 55 years old, working under normal conditions, has a 61% reduction in working capacity, has 32 years and 4 months of compulsory social insurance contributions, and retires from January 1, 2025.

In Ms. A's case, the pension rate is calculated as follows:

The first 15 years are calculated at 45%;

From year 16 to year 32 is 17 years, each year adds 2% equal to 34%;

Ms. A's remaining 4 months are counted as half a year, plus 1%.

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Female workers must have paid social insurance for 30 years and reach retirement age to receive the maximum pension of 75%. Illustration photo: C.Hieu

The total of the above rates is: 45% + 34% + 1% = 80% (but the maximum is only calculated at 75%);

Ms. A retired 1 year and 8 months before the prescribed age (56 years and 8 months), so the pension rate is reduced: 2% + 1% = 3%;

Thus, Ms. A's monthly pension rate is 75% - 3% = 72%.

In addition, because Ms. A has paid social insurance for more than 30 years (more than 2 years and 4 months), in addition to her pension, she is also entitled to a one-time subsidy of 2.5 years x 0.5 times the average salary used as the basis for paying social insurance.

Over 40 years old paying social insurance still get pension

The new Social Insurance Law stipulates that employees who reach retirement age only need to pay social insurance for 15 years instead of 20 years as in the 2014 Social Insurance Law to still receive pension benefits.

For example, Mr. B is 61 years and 3 months old, working under normal conditions, has 18 years and 4 months of mandatory social insurance contributions, and retires from September 1, 2025.

In Mr. B's case, the pension rate is calculated as follows:

The first 15 years are calculated at 40%;

From year 16 to year 18 is 3 years, calculate more: 3 x 1% = 3%;

4 months is counted as half a year, add 0.5%

The sum of the above rates is: 40% + 3% + 0.5% = 43.5%.

Thus, Mr. B's monthly pension rate is 43.5%.

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Workers who are of retirement age and have paid social insurance for 15 years are entitled to a pension. Illustrative photo

Hard and toxic laborers retire early

The Ministry of Labor, War Invalids and Social Affairs also provides a calculation method for cases of heavy, hazardous and dangerous labor issued by the Minister of this Ministry. For example: Mr. K retires and receives his pension in April 2027 when he turns 55 years old.

Mr. Khoi has 30 years of social insurance contributions, including 15 years of hard, toxic, and dangerous work as listed by the Minister of Labor, Invalids and Social Affairs; his working capacity has been reduced by 81%.

In Mr. K's case, the pension rate is calculated as follows:

The first 20 years are calculated at 45%.

From year 21 to year 30 is 10 years, calculate: 10 x 2% = 20%.
The total of the above two ratios is: 45% + 20% = 65%.

Mr. Khoi retired 1 year and 9 months before the age of 56 years and 9 months (the retirement age in 2027 for employees with 15 years or more of experience in heavy, toxic, or dangerous jobs) is 1 year and 9 months, so the deduction rate for early retirement is 2% + 1% = 3%;

Thus, Mr. K's monthly pension rate is 65% - 3% = 62%.