Will pensions increase after the salary reform in Vietnam in 2024? How much is the current monthly pension?
Will pensions increase after the salary reform in Vietnam in 2024?
Pursuant to the provisions of Section 2 of Resolution 27-NQ/TW of 2018, the upcoming salary reform will adjust and change the salary structure for subjects including officials, public employees and armed forces; workers in the enterprise. Some specific contents are as follows:
For officials, public employees and armed forces (public sector):
- Develop a new salary structure including:
+ Basic salary (accounts for about 70% of total salary budget) and allowances (accounts for about 30% of total salary budget).
+ Additional bonus (bonus fund equals about 10% of the year's total salary fund, excluding allowances).
- Develop a new salary table according to job position, title and leadership position to replace the current salary table system.
+ Develop a position salary table applicable to officials, and public employees holding leadership positions.
+ Develop a professional salary table according to civil servant ranks and civil servant professional titles, applicable generally to civil servants and public employees who do not hold leadership positions.
+ Develop 3 salary tables for the armed forces
For employees in enterprises:
- Amend the regional minimum wage to ensure the minimum living standard of workers and their families.
- Continue to improve the policy on monthly regional minimum wages.
- Supplement regulations on hourly regional minimum wage.
In addition, through the 8th Conference of the 13th Party Central Committee taking place on October 2, 2023, it was mentioned that salary reform is expected to be implemented from July 1, 2023.
In addition, according to current law, the pension level will be determined based on the employee's salary. Therefore, the increase in pension after salary reform from July 1, 2024 (applicable to cases of leave receiving new salary after July 1, 2024) will be implemented in case of salary increase adjustment according to the salary reform.
Will pensions increase after the salary reform in Vietnam in 2024? How much is the current monthly pension?
How much is the current monthly pension in Vietnam?
Pursuant to Article 56 of the Law on Social Insurance 2014, the current monthly pension levels are as follows:
For employees who fully satisfy the conditions specified in Article 54 Law on Social Insurance 2014:
Monthly pension = 45% of the average monthly salary on which social insurance premiums are based as follows:
- Male workers retiring in 2018 are 16 years, in 2019 are 17 years, in 2020 are 18 years, in 2021 are 19 years, from 2022 onwards are 20 years
- Female workers retiring from 2018 onwards will have 15 years.
After that, for each additional year, employees belonging to the above two subjects will be charged an additional 2%; The maximum level is 75%.
For employees who fully satisfy the conditions specified in Article 55 Law on Social Insurance 2014:
Monthly pension = 45% of the average monthly salary on which social insurance premiums are based as follows:
- Male workers retiring in 2018 are 16 years, in 2019 are 17 years, in 2020 are 18 years, in 2021 are 19 years, from 2022 onwards are 20 years
- Female workers retiring from 2018 onwards will have 15 years.
*After that, the monthly pension shall reduce by 2% for each year of early retirement. In case an employee’s age is short of up to 6 months compared to the retirement age, his/her pension shall be reduced by 1%; if his/her age is short of under 6 months, his/her pension shall not be reduced due to early retirement.
When is the time for pension enjoyment in Vietnam?
According to the provisions of Article 59 of the Law on Social Insurance 2014, specific regulations on the time for pension enjoyment are as follows:
Time for pension enjoyment
1. For employees who are paying compulsory social insurance premiums as defined at Points a, b, c, d, dd, e and i, Clause 1, Article 2 of this Law, the time for pension enjoyment is the time stated in work cessation decisions issued by employers when the employees have fully satisfied the law-prescribed conditions for pension enjoyment.
2. For employees who are paying compulsory social insurance premiums as defined at Point h, Clause 1, Article 2 of this Law, the time for pension enjoyment is the month following the month when they have fully satisfied the conditions for pension enjoyment and submitted written requests to social insurance agencies.
3. For employees defined at Point g, Clause 1, Article 2 of this Law and persons who have their period of social insurance premium payment reserved, the time for pension enjoyment is the time stated in the written requests of the employees who have fully satisfied the prescribed conditions for pension enjoyment.
4. The Minister of Labor, Invalids and Social Affairs shall stipulate in detail the time for pension enjoyment for employees defined in Clause 1, Article 2 of this Law.
Accordingly, depending on the employee participating in social insurance, the time for pension enjoyment is determined as follows:
- the time for pension enjoyment is the time stated in work cessation decisions issued by employers when the employees have fully satisfied the law-prescribed conditions for pension enjoyment.
- the time for pension enjoyment is the month following the month when they have fully satisfied the conditions for pension enjoyment and submitted written requests to social insurance agencies.
- the time for pension enjoyment is the time stated in the written requests of the employees who have fully satisfied the prescribed conditions for pension enjoyment
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