Decree 178/2024/ND-CP: Will early retirement be deducted from pension?

People come to resolve administrative procedures at Binh Phuoc Provincial Social Insurance

In order to ensure the effectiveness of streamlining the payroll and apparatus, the Government has issued Decree No. 178/2024/ND-CP on policies and regimes for cadres, civil servants, public employees and workers in the implementation of the organizational arrangement of the political system (Decree 178). Accordingly, recently, many cadres, civil servants and public employees have come to the Social Insurance (SI) of Binh Phuoc province to have their questions answered about the early retirement regime according to Decree 178. According to records, every day at the Department of receiving and returning administrative procedure results under the provincial SI, dozens of people come to discuss and learn about whether early retirement will be deducted from the pension rate?

Mr. Le Van Hung (born in 1969), a local official, shared: He has 30 years of working and participating in compulsory social insurance at an administrative agency and is considering applying for early retirement under Decree 178. However, colleagues, friends, and relatives said that if he retires under this category, he will not be entitled to the maximum pension of 75% of the average salary. This made him hesitant and he decided to go to the provincial social insurance agency to find out more before deciding whether to retire or continue working.

Sharing the same concern, Ms. Tran Thi Mai, an office worker at a district-level agency in the province, said: “Before deciding to apply for early retirement under Decree 178 or continue working, my colleagues and I went to the provincial Social Security agency to ask for clarification. There was a lot of information circulating, some people said this, some said that, we didn’t know what was true, so we had to go to the provincial Social Security agency to listen to the staff’s advice to feel secure.”

The representative of the provincial Social Insurance leadership said that currently many workers have misunderstood that retirement under Decree 178 will automatically be entitled to a maximum pension of 75%. In fact, the regulation is not entirely like that.

Specifically, Clause 2, Article 7 of Decree 178 (amended and supplemented in Clause 5, Article 1 of Decree No. 67/2025/ND-CP) stipulates: In case cadres, civil servants, public employees, and employees in agencies, organizations, units, and armed forces retire early due to restructuring of the organizational apparatus, their pension rate will not be deducted for the reason of early retirement. However, the specific pension level still depends on the time of participation in social insurance of each individual.

According to current regulations (Social Insurance Law 2014), the pension rate is calculated as follows: For women, they are entitled to 45% of the average salary for social insurance contributions when they have 15 years of social insurance participation. For men, they are entitled to 45% of the average salary when they have 20 years of social insurance participation. After that, each year of social insurance contributions is added 2%, up to a maximum of 75%. Thus, to reach the maximum pension rate of 75%, female workers need to have at least 30 years, and male workers need to have at least 35 years of social insurance participation.

Returning to Mr. Hung's case, he has now paid social insurance for 30 years. Applying the above regulations, he is entitled to: 45% for the first 20 years; plus 2% for each year from the 21st to the 30th year, or an additional 20%. In total, Mr. Hung will be entitled to 65% of the average salary used as the basis for paying social insurance. In case he retires before the age according to Decree 178, he will not be deducted the rate for early retirement, but he will not be able to reach 75% because he has not paid enough social insurance.

“Therefore, before deciding to retire under Decree 178, employees need to proactively learn about the regulations related to conditions, pension levels and social insurance payment periods. Having a clear understanding of the information will help ensure legitimate rights and avoid unfortunate misunderstandings that affect income and life plans after retirement,” the leader of Binh Phuoc Social Insurance recommended.

According to the 2019 Labor Code, the retirement age of employees under normal conditions will increase by 3 months for men and 4 months for women until men reach 62 years old in 2028 and women reach 60 years old in 2035. In 2025, the retirement age for men will be 61 years and 3 months, and for women it will be 56 years and 8 months.

According to statistics, by April 2025, Binh Phuoc has nearly 18,000 people receiving monthly pensions and social insurance benefits, of which 85% receive pensions and benefits via ATM cards.

Source: https://baobinhphuoc.com.vn/news/9/172828/nghi-dinh-178-2024-nd-cp-nghi-huu-truoc-tuoi-co-bi-tru-luong-huu