How does the person with the highest pension in the country pay social insurance?

According to Nguoi Lao Dong newspaper , after many pension adjustments, Mr. PPNT has received a salary of up to 140 million VND/month and may increase from next month.

Before the basic salary increase in July 2023, Mr. T's pension was more than 124 million VND/month. After the pension adjustment, Mr. T's current salary is up to 140 million VND/month.

Explaining this "huge" pension, the social insurance agency said that before retiring, Mr. T. was the Chairman of the Board of Members and General Director of a company and had paid very high levels of social insurance contributions during 23 years of participating in social insurance.

In particular, before 2007, when the salary was regulated as the basis for social insurance contributions based on actual salary (not subject to the ceiling limit as currently regulated), Mr. T's contribution level was very high. There were times when Mr. T's average social insurance contribution salary was more than 200 million VND/month.

According to information in the Government newspaper, when the Law on Social Insurance 2006 came into effect, the maximum monthly salary for compulsory social insurance contributions was stipulated to be equal to 20 months of the general minimum wage (or basic salary). Accordingly, from January 2007 to March 2015, Mr. T. always paid social insurance at the highest level as prescribed, with an average social insurance contribution salary of 15.4 million VND/month. Of which, nearly 2 years before his retirement (the basic salary at that time was 1.15 million VND), Mr. T.'s monthly salary for social insurance contributions was 23 million VND/month.

In April 2015, Mr. T. retired with a pension of more than 87.3 million VND/month. From July 1, 2024, after implementing salary reform, the pension will also be adjusted to increase once more, so Mr. T.'s pension may increase even more.

Adjusting pension increase from July 1, 2024, leaving no one disadvantaged

According to Tien Phong newspaper, from July 1, 2024, cadres, civil servants, public employees and workers paying social insurance are expected to receive a new salary higher than the current one. With the current method of calculating pensions based on the last years before retirement, increasing the social insurance salary will lead to an increase in pensions.

Accordingly, the longer the period of receiving the new salary for cadres, civil servants and public employees, the higher the pension will be compared to those who retire before July 1, 2024.

Thus, those retiring after July 1, 2024 will likely receive a much higher pension than those retiring before the salary reform, which leads to a pension gap between those retiring before and after July 1, 2024 when the salary reform occurs.

According to Vietnam Social Security, to ensure the balance of benefits between retirees before and after July 1, 2024 and to ensure the balance in revenue and expenditure, the unit has proposed to adjust the pension increase from July 1 with an increase of about 8%.

Based on each specific subject, the pension level after reform will be built and adjusted so that both those who retire before or after the salary reform period will not be disadvantaged.

The Ministry of Labor, Invalids and Social Affairs said that from July 1, 2024, there will be 3 pension adjustment levels for 3 groups of subjects when reforming salaries, including:

- For the group of people retiring after July 1, 2024, the current pension increase will be carefully and reasonably calculated by the Ministry and relevant agencies, in harmony between people with the same position and professional work before and after the reform period of July 1, 2024.

- For those who retire before July 1, 2024, since this is a group of people that will be considered when implementing salary reform, the State will arrange a compensation level to reduce the salary difference between those who retire before and after the salary reform period.

Those who retire before July 1, 2024, in addition to being subject to social insurance policies, will still be guaranteed full benefits like normal retirees.

The pension adjustment must not be lower than 50% of the increase after the reform to ensure balance and not let those who retire before July 1 suffer a disadvantage after the salary reform.

-For those who retired before 1995, the Ministry of Labor, Invalids and Social Affairs said there will be special policies to push pensions even higher for this group of people.

Minh Hoa (t/h)

Source: https://www.nguoiduatin.vn/nguoi-dang-huong-luong-huu-cao-nhat-ca-nuoc-dong-bhxh-ra-sao-a669263.html