Has the Government of Vietnam proposed receiving a pension upon full 15 years of social insurance premium payment to increase the number of pension beneficiaries?
Has the Government of Vietnam proposed receiving a pension upon full 15 years of social insurance premium payment to increase the number of pension beneficiaries?
Under Point dd, Section 2, Chapter IV of Proposal 527/TTr-CP Here, the draft Proposal for the Law on Amendments to Law on Social Insurance addresses the issue of receiving monthly pensions with full 15 years of social insurance premium payment to increase the number of pension beneficiaries as follows:
Reduce the minimum number of years of social insurance premium payment required to receive a monthly pension from 20 years to 15 years to create opportunities for those who joined late or had discontinuous participation to receive a pension (Article 64).
- Political Basis: Resolution 28-NQ/TW of 2018 stipulates: Amending the conditions for pension entitlement towards gradually reducing the minimum number of social insurance contribution years required to receive a pension from 20 years to 15 years, aiming towards 10 years, with the benefit level calculated appropriately to facilitate access to and enjoyment of social insurance benefits for older workers with low participation years.
- Practical Basis: According to statistics, in the seven years of implementing the Law on Social Insurance 2014, more than 476 thousand people who received lump-sum social insurance payout had over 10 years of participation with ages 40 and above; more than 53 thousand people who reached retirement age had to receive lump-sum social insurance payout due to insufficient compulsory social insurance contribution years of 20; more than 20 thousand people had to make one-time payments for the remaining period to receive pensions when they reached retirement age. If the minimum period to receive a pension remains 20 years, these individuals will face challenges in receiving a pension.
Proposed Amendments:
Article 64 of the draft Law on Amendments to Law on Social Insurance stipulates that workers who reach retirement age with at least 15 years of social insurance premium payment will be eligible for a monthly pension.
This provision aims to create opportunities for those who join late (starting at age 45-47) or have discontinuous participation leading to not accumulating enough 20 years of social insurance premium payment to receive a monthly pension instead of a lump-sum social insurance payout.
With the proposed amendments, individuals who have contributed to social insurance for 15 years and meet the retirement age condition can receive a monthly pension.
Under this provision, the pension for those with 15 years of social insurance premium payment may be lower than for those with longer contribution periods if the salary basis for compulsory social insurance premium payment or income basis for voluntary social insurance premium payment is the same.
However, previously, those who did not meet the criteria to receive a pension would receive a lump-sum social insurance payout (if they did not choose to make a one-time voluntary payment for the remaining period). Now, they will have the opportunity to receive a monthly pension.
Although the pension amount may be modest compared to those with longer contribution periods, a stable monthly pension, periodically adjusted by the government, and with the period of pension being covered by the social insurance fund for health insurance, would better ensure the livelihood of workers in old age.
The provision to reduce the minimum social insurance contribution required to receive a monthly pension from 20 years to 15 years only applies to cases of retirement under Article 64 and not to cases of early retirement stipulated in Article 65.
For early retirement cases under Article 65 of the draft Law on Amendments to Law on Social Insurance, the benefit rate will be reduced by 2% for each year of early retirement.
Thus, applying this provision to early retirement cases under Article 65 would result in a very low pension benefit rate (short contribution period, reduced rate due to early retirement), leading to an insignificant pension amount (e.g., a male worker with 15 years of social insurance premium payment would have a pension rate of 33.75%; if retiring 5 years early with a 10% reduction, the pension rate would only be 23.75%).
Has the Government of Vietnam proposed receiving a pension upon full 15 years of social insurance premium payment to increase the number of pension beneficiaries? (Image from the Internet)
What is the required period for social insurance premium payment to receive a pension in Vietnam?
Under Articles 54, 55, and 73 of the Law on Social Insurance 2014 (amended by Clause 1, Article 219 of the Labor Code 2019), to receive a pension, participants in social insurance (including compulsory and voluntary social insurance) must meet the requirements on retirement age and the period of social insurance premium payment.
Regarding the period of social insurance premium payment:
- For compulsory social insurance participants: Must have at least 20 years of social insurance premium payment, except for female workers who are specialized or non-specialized personnel in communes, wards, and towns, who must have at least 15 years of social insurance premium payment.
- For voluntary social insurance participants: Must have at least 20 years of social insurance premium payment.
What are the current conditions for receiving a pension in Vietnam?
Under Article 54 of the Law on Social Insurance 2014 (amended by Point a, Clause 1, Article 219 of the Labor Code 2019):
Article 54. Conditions for receiving retirement pension
1. An employee mentioned in Points a, b, c, d, g, h and i Clause 1 Article 2 of this Law, except for the cases specified in Clause 3 of this, will receive retirement pension if he/she has paid social insurance for at least 20 years and:
a) He/she has reached the retirement age specified in Clause 2 Article 169 of the Labor Code;
b) He/she has reached the retirement age specified in Clause 3 Article 169 of the Labor Code and has at least 15 years’ doing the laborious, toxic or dangerous works or highly laborious, toxic or dangerous works on the lists of the Ministry of Labor, War Invalids and Social Affairs; or has at least 15 years’ working in highly disadvantaged areas, including the period he/she works in areas with the region factor of at least 0,7 before January 01, 2021;
c) His/her age is younger than the retirement age specified in Clause 2 Article 169 of the Labor Code by up to 10 years and he/she has worked in coal mines for at least 15 years; or
d) He/she contracted HIV due to an occupation accident during performance of his/her assigned duty.
2. An employee mentioned in Points dd and e Clause 1 Article 2 of this Law will receive retirement pension if he/she has paid social insurance for at least 20 years and:
a) His/her age is younger than the retirement age specified in Clause 2 Article 169 of the Labor Code by up to 05 years, unless otherwise prescribed by the Law on Military Officer of Vietnam’s Army, the Law of People’s Police, the Law on Cipher and the Law on professional servicemen and women, national defense workers and officials;
b) His/her age is younger than the retirement age specified in Clause 3 Article 169 of the Labor Code by up to 05 years and he/she has at least 15 years’ doing the laborious, toxic or dangerous works or highly laborious, toxic or dangerous works on the lists of the Ministry of Labor, War Invalids and Social Affairs; or has at least 15 years’ working in highly disadvantaged areas, including the period he/she works in areas with the region factor of at least 0,7 before January 01, 2021; or
c) He/she contracted HIV due to an occupation accident during performance of his/her assigned duty.
3. A female employee that is a commune official or a part-time worker at the commune authority and has paid social insurance for 15 to under 20 years and reaches the retirement age specified in Clause 2 Article 169 of the Labor Code will receive the retirement pension.
4. The Government shall provide for special cases of retirement age.
Thus, current conditions for receiving a pension are determined based on the aforementioned contents.
LawNet