Pursuant to Clause 2, Article 169 of the 2019 Labor Code and Article 4 of Decree 135/2020/ND-CP, the retirement age of employees in normal working conditions is adjusted according to the roadmap until reaching 62 years old for male employees in 2028 and 60 years old for female employees in 2035.
According to the roadmap, in 2024 the retirement age for men is 61 years old, and for women is 56 years and 4 months.
Regarding the content that employees are interested in, how many years of social insurance payment are needed to receive a 75% pension, the representative of Hanoi Social Insurance said that the monthly pension level is stipulated in Article 56 of the Law on Social Insurance 2014 and guided by Clause 2, Article 7 of Decree 115/2015 of the Government.
Specifically: Employee's monthly pension = Monthly pension rate x Average monthly salary for social insurance contribution.
In which, the monthly pension rate of employees eligible for pension is calculated as follows:
For female workers retiring from January 1, 2018 onwards, the monthly pension rate is calculated at 45% corresponding to 15 years of social insurance contributions; then for each additional year of social insurance contributions, an additional 2% is calculated; the maximum level is 75. Thus, female workers need 30 years of social insurance contributions to receive the maximum pension (75%).
For male workers retiring from January 1, 2018 onwards, the monthly pension rate is calculated at 45% corresponding to the number of years of social insurance contributions, then each additional year of social insurance contributions is calculated by adding 2%; the maximum level is 75%. Thus, male workers need 35 years of social insurance contributions to receive the maximum pension (75%).
For employees who receive pension before the prescribed age due to reduced working capacity, the monthly pension rate will also be calculated as above, but for each year of retirement before the prescribed age, it will be reduced by 2%.
Proposal to loosen the maximum pension ceiling
Commenting on the draft Law on Social Insurance (amended) being submitted to the National Assembly , 13 business associations said that the maximum pension rate should be calculated based on the total time of social insurance participation of the employee, and should not apply the current ceiling of 75%...
Business associations stated: Regarding retirement age, according to the roadmap, by 2035, men will be 62 years old and women will be 60 years old. In addition, the Social Insurance Law stipulates that workers can retire early up to 5 years lower than the retirement age when their working capacity is reduced from 61% to less than 81%.
For those who are eligible for retirement, 2% will be deducted for each year of early retirement. Associations say these regulations are not suitable for the reality of Vietnamese workers.
According to associations, there are many workers who participate in social insurance early, but by the age of 50-55, their health has declined, they are unable to meet work demands, and it is even very difficult to find a job, and they have paid social insurance for 20 years, even 30 years, so both the time and the amount of money paid for social insurance are large enough.
Waiting until retirement age will make it difficult to ensure living expenses. Letting older workers retire early also aims to give younger workers more job opportunities.
The association's proposal that subjects with a period of social insurance contributions lower than the number of years corresponding to the pension rate of 75% will have 2% deducted for each year of not paying social insurance. This deduction is too high compared to the lump sum pension benefit level upon retirement for subjects with a period of contributions higher than the number of years corresponding to the rate of 75%.
The associations also proposed that in the case of employees who are old enough to retire early (up to 5 years lower than the retirement age) according to regulations, and have paid social insurance for more than 20 years, they are entitled to retire. For each year of early retirement, 1 month of salary will be deducted, or the maximum deduction will not exceed 1% corresponding to 1 year as per the Social Insurance Law 2006.
In case of reaching early retirement age and having paid social insurance for 30 years for women, and 32 years for men, they will be able to retire immediately and receive a maximum pension of 75%.
According to the associations, the calculation of one-time allowance for years exceeding the maximum pension period (75%) equal to 0.5 months of average salary used as the basis for social insurance contributions is unreasonable.
Meanwhile, for employees who want to leave the Social Insurance Fund and receive a one-time social insurance benefit, each year of work (after 2014) will receive 2 times the average salary used as the basis for social insurance contributions. Meanwhile, employees who remain with the Fund and contribute for more than 30 years will only receive 0.5 times. Therefore, the associations propose that the maximum pension rate should be calculated based on the total time of social insurance participation, and should not apply a ceiling of 75%.
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