(Dan Tri Newspaper) - From July 1, 2025, workers will have the opportunity to receive higher pensions thanks to the supplementary retirement insurance scheme.
Opportunities for high pension benefits
Prior to January 1, 2007 (when the 2006 Social Insurance Law came into effect), the social insurance system did not specify a maximum salary for social insurance contributions. During that period, many workers in foreign-invested enterprises contributed to social insurance based on salaries significantly higher than the average. This led to a large disparity in pension benefits between different groups of workers.
According to statistics from the Ho Chi Minh City Social Insurance Agency in June 2024, the highest pensioner in the city received 140 million VND per month. Meanwhile, the lowest pensioner's pension was still less than 2 million VND per month. This means the highest pensioner's pension is 70 times higher than the lowest.
Workers have the opportunity to receive a higher pension if they choose to participate in supplementary retirement insurance (Illustrative image: Ho Chi Minh City Social Insurance).
However, the 2006 Social Insurance Law stipulated that the maximum salary used as the basis for mandatory social insurance contributions is 20 times the base salary at the time of contribution. This has helped to reduce the gap in pension benefits between different groups of workers.
At the same time, the regulation on the maximum social insurance contribution also restricts those with pensions of hundreds of millions of dong per month, which is too high compared to the general average.
This regulation was maintained in the 2014 Social Insurance Law. The 2024 Social Insurance Law (effective from July 1, 2025) also maintains the above regulation under Point d, Clause 1, Article 31, only replacing the base salary with a reference level (to be specifically stipulated by the Government ).
To meet the needs of a segment of high-income workers who desire exceptionally high pensions, the 2024 Social Insurance Law adds a chapter with four articles regulating supplementary retirement insurance schemes.
According to Dr. Pham Truong Giang, Director of the Social Insurance Department of the Ministry of Labor, Invalids and Social Affairs , one of the 14 major contents of the 2024 Social Insurance Law is the addition of regulations on the subjects, principles, funds, and state policies for supplementary retirement insurance.
The Legal Department of Vietnam Social Security assesses that the supplementary retirement insurance regulations create conditions for employers and employees to have more choices and participate in contributing to receive higher pension benefits.
Supplementary pension insurance fund
Article 124 of the 2024 Social Insurance Law stipulates: "The subjects participating in supplementary retirement insurance are employers and employees."
Supplementary retirement insurance will operate according to four main principles stipulated in Article 125 of the 2024 Social Insurance Law.
Firstly, the amount of supplementary retirement insurance contributions is voluntarily agreed upon by the employer and the employee.
Secondly, contributions to the supplemental retirement insurance fund are managed through individual retirement accounts.
Thirdly, the management of supplementary pension insurance funds must adhere to the principles of openness and transparency, and must ensure that investments are made in accordance with the law.
Finally, the amount of supplemental retirement insurance payout is determined based on the individual's retirement account balance at the time of payment, accumulated through investment activities of the supplemental retirement insurance fund according to market principles.
The concept of a supplementary pension insurance fund is also clarified in Article 126 of the 2024 Social Insurance Law.
Accordingly, the Supplementary Pension Insurance Fund is a financial fund independent of the state budget; it is accounted for, reported on, and audited in accordance with the laws on accounting and auditing.
The sources of funding for the supplemental pension insurance fund include contributions from employers, employees, and the returns from the fund's investment activities.
The supplemental pension insurance fund is used to pay supplemental pension benefits to employees, as well as organizational and administrative costs.
The State's policy on supplementary retirement insurance is specifically stipulated in Article 127 of the Social Insurance Law of 2024.
Accordingly, the State encourages the development of supplementary retirement insurance through preferential policies as stipulated by tax laws.
At the same time, the State will improve the laws and policies on supplementary retirement insurance, organize the implementation of the policy in a professional, modern, and transparent manner; and create conditions for employers and employees to participate.
Source: https://dantri.com.vn/an-sinh/co-hoi-huong-luong-huu-cao-nho-huu-tri-bo-sung-20241218173600105.htm
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