Vietnam Social Security has just sent comments to the Ministry of Labor, Invalids and Social Affairs on the plan to adjust pensions, social insurance benefits and monthly allowances in 2024. Accordingly, Vietnam Social Security proposed an increase of 8% for pensioners in both the public and private sectors from July 1, with an estimated cost of more than VND 8,800 billion.

If approved, the State budget is expected to allocate an additional VND1,900 billion in the last 6 months of the year; an additional VND50 billion if the benefit level is adjusted to VND3.5 million per month for those who retired before 1995. The Social Insurance Fund source will increase by about VND6,900 billion, excluding health insurance contributions.

Vietnam Social Security calculates that in the next 5 years, if pensions and benefits are calculated based on the average salary paid for social insurance during the entire period of participation in the system, the pension level of workers will only increase by about 5% excluding inflation. The pension of those retiring after July 1, 2024 will also only increase by 0.13% compared to those retiring before June 2024.

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Social Insurance proposes to increase pension by 8% from July 1.

Vietnam Social Security believes that the pension adjustment of 8% from July 1 is appropriate. The increase is based on the consumer price index of 3.35% and GDP reaching 5.05% in 2023; at the same time, it will also reduce the difference in benefits between pensioners before the salary reform and pensioners from July 1 onwards.

This is the general pension adjustment level for all pensioners, including employees who paid social insurance according to the salary level prescribed by the State before retirement and those who paid social insurance according to the salary level decided by the employer.

Statistics by the end of 2023 show that the average salary for social insurance contributions of state-owned employees is currently 6.9 million VND, with a pension of about 6.1 million VND. The salary used as the basis for calculating social insurance contributions of employees in enterprises and cooperatives is nearly 6.4 million VND.

From mid-2024, officials, civil servants and public employees will be paid according to their job position instead of the current flat coefficient.

It is expected that from 2025, salaries of cadres, civil servants, public employees, and armed forces will continue to increase by an average of 7% per year until the lowest salary in the public sector is equal to or higher than the lowest salary in region 1 of the business sector.