A 15% increase in pensions helps ease the burden of city living in retirement.

Struggling to make ends meet in the city.

Mr. Nui, 65 years old, continued working as an office employee and driver for a company in District 3 after retirement, earning 6 million VND per month.

Mr. Nui retired in 2022 upon reaching retirement age, having contributed to social insurance for 32 years, thus meeting the eligibility requirements for a pension. However, his enjoyment of retirement was short-lived, as he felt stifled by his low pension, which was insufficient to cover his living expenses.

"With 32 years of social insurance contributions in various positions such as office worker and driver for state agencies, I only receive a pension of less than 4 million VND per month. My pension is not enough to cover my personal expenses while living in Ho Chi Minh City," Mr. Nui said.

luong-huu_Xuan-Truong — Retired officials in Ho Chi Minh City receive their monthly pensions (Photo: Pham Tho).

Therefore, Mr. Nui applied for additional work in the form of a seasonal employment contract. Due to his age, he had to accept working for a low wage compared to the general labor market. His pension plus his seasonal wages, totaling nearly 10 million VND per month, was barely enough for him to live in the city.

Like Mr. Nui, many workers, laborers, and civil servants in Ho Chi Minh City are currently worried that their pensions will not be enough to cover their living expenses after retirement.

Ms. Pham Thuy H. (52 years old, a worker in Ho Chi Minh City) said that after many years of working for the company and several salary adjustments, her social insurance contributions are currently based on a salary of 5.4 million VND per month. Ms. H. is worried that even if she receives the maximum 75% of her average monthly salary used as the basis for insurance contributions, the amount she receives each month will still be meager.

Ms. H. calculated that if she used her pension money after retirement to open a small grocery store or coffee shop, it would be easier to make a living.

Increase pensions to ensure social security.

With the news that pensions will be adjusted upwards from July 1st this year, Mr. Nui and his friends and acquaintances all expect their pensions to increase by at least 15%.

"The cost of living in Ho Chi Minh City is very high, and market prices are constantly rising, so the current pension is not enough to live on. I really hope that pensions will increase so that elderly people like us don't have to work extra jobs," Mr. Nui expressed.

cong-nhan_Xuan-Truong — Workers already face hardship, and when they retire with low pensions, the pressure increases even more (Photo: Xuan Truong).

According to Ho Minh Son, Director of the Institute for International Market and Communication Research, the Ministry of Labor, Invalids and Social Affairs' proposal to increase pensions by at least 15% from July 1st is very appropriate.

"Adjusting pensions by at least 15% is very appropriate and timely in the context of escalating market prices. However, to reduce the disparity in pensions over time, a minimum pension floor needs to be established," Mr. Son stated.

According to Mr. Son, timely adjustments to pensions are a way to prevent and reduce the number of workers withdrawing their social insurance contributions in a lump sum.

"The purpose of participating in social insurance is to ensure long-term social security when each person reaches retirement age. Many workers withdrawing social insurance in a lump sum places a burden on ensuring social security later on. We always advise workers not to withdraw social insurance in a lump sum to avoid losing many benefits," Mr. Son emphasized.

According to a recent proposal from the Ministry of Labour, Invalids and Social Affairs, from July 1st, pensions and social insurance benefits will increase by 15%; preferential allowances for people with meritorious services to the revolution will increase by 29.2%, equivalent to an increase from VND 2,055,000/month to VND 2,655,000/month; and social allowances will increase by 38.9%, equivalent to an increase from VND 360,000 to VND 500,000/month.

Source