Monthly Pension Benefits for Participants in Mandatory Social Insurance in 2024
What Are the Drawbacks of Withdrawing One-time Social Insurance Compared to Continuing Contributions to Receive a Pension?
On May 22, 2024, Vietnam Social Insurance issued Official Dispatch 1488/BHXH-TT of 2024 to enhance specialized communication on one-time social insurance.
According to Appendix I issued in conjunction with Official Dispatch 1488/BHXH-TT of 2024, the comparison of drawbacks when withdrawing one-time social insurance versus continuing contributions to receive a pension is as follows:
Assume the worker has completed 20 years of social insurance contributions (from 2003-2022), including 11 years before 2014 and 9 years from 2014 onwards, with an average monthly salary of 6 million VND. Assuming the worker qualifies for a pension or one-time social insurance in 2024, the amount received would be:
(1) In case of withdrawing one-time social insurance, the amount received would be:
6,000,000 VND x (1.5 x 11 years + 2 x 9 years) = 207,000,000 VND.
(2) In case the worker has completed 20 years of social insurance contributions and qualifies for a pension, the total benefits would be:
- For male workers (at 61 years old, based on the average male life expectancy of 71.1 years, the estimated pension period is 10.1 years, equivalent to 121 months):
+ Pension rate of 45%, pension amount is 6,000,000 VND x 45% = 2,700,000 VND.
Total pension amount received: 121 x 2,700,000 VND = 326,700,000 VND.
+ Purchase of health insurance card (4.5% of the monthly pension):
4.5% x 121 x 2,700,000 = 14,701,500 VND.
+ Funeral allowance (10 months of statutory pay rate): 18,000,000 VND.
+ One-time survivorship allowance (03 months of pension before death): 8,100,000 VND.
Total amount received from the social insurance fund: 367,501,500 VND.
- For female workers (at 56 years and 4 months, based on the average female life expectancy of 76.5 years, the estimated pension period is 20 years and 2 months, equivalent to 242 months):
+ Pension rate of 55%, pension amount is 6,000,000 VND x 55% = 3,300,000 VND.
Total pension amount received: 242 x 3,300,000 VND = 798,600,000 VND.
+ Purchase of health insurance card (4.5% of the monthly pension):
4.5% x 242 x 3,300,000 = 35,937,000 VND.
+ Funeral allowance (10 months of statutory pay rate): 18,000,000 VND.
+ One-time survivorship allowance (03 months of pension before death): 9,900,000 VND
Total amount received from the social insurance fund: 862,437,000 VND.
Monthly Pension Amount for Mandatory Social Insurance Participants in 2024
What Is the Monthly Pension Amount for Mandatory Social Insurance Participants in 2024?
According to Article 7 of Decree 115/2015/ND-CP regarding the monthly pension amount:
Monthly Pension Amount
The monthly pension amount stipulated in Article 56 of the Social Insurance Law is defined as follows:
1. The monthly pension amount of a worker is calculated by the monthly pension rate multiplied by the average monthly salary used for social insurance contributions.
2. The monthly pension rate for workers eligible for retirement as stipulated in Article 54 of the Social Insurance Law is calculated as follows:
a) Workers retiring from January 1, 2016, to before January 1, 2018, the monthly pension rate is calculated at 45% for 15 years of social insurance contributions, then an additional 2% for each additional year of contributions for men and 3% for women; the maximum rate is 75%;
b) Female workers retiring from January 1, 2018, onwards, the monthly pension rate is calculated at 45% for 15 years of social insurance contributions, then an additional 2% for each additional year of contributions; the maximum rate is 75%;
c) Male workers retiring from January 1, 2018, onwards, the monthly pension rate is calculated at 45% for the number of years of social insurance contributions as per the below table, then an additional 2% for each additional year of contributions; the maximum rate is 75%.
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** Monthly pension amount calculation for 2024 includes:**
| Monthly Pension Amount | = | Monthly Pension Rate (%) | X | Average Monthly Salary for Social Insurance Contributions || --- | --- | --- | --- | --- |
The monthly pension rate is determined as follows:
- Workers retiring from January 1, 2016, to before January 1, 2018:
+ The monthly pension rate is calculated at 45% for 15 years of contributions.
+ Then an additional 2% for each additional year of contributions for men and 3% for women; the maximum rate is 75%.
- Male workers retiring from January 1, 2018, onwards:
The monthly pension rate is 45% of the average monthly salary used for social insurance contributions according to the below table. Then each additional year of contributions adds 2%, with a maximum rate of 75%.
| Year of Retirement | Corresponding Years of Social Insurance Contributions for 45% Pension Rate || --- | --- || 2018 | 16 years || 2019 | 17 years || 2020 | 18 years || 2021 | 19 years || From 2022 onwards | 20 years |
- Female workers retiring from January 1, 2018, onwards:
The monthly pension rate is 45% of the average monthly salary used for social insurance contributions for 15 years of contributions. Then each additional year of contributions adds 2%, with a maximum rate of 75%.
Thus, the monthly pension amount for mandatory social insurance participants is calculated as per the aforementioned formula.
What Are the Conditions for Workers to Receive a Pension in 2024?
The conditions for workers to receive a pension in 2024 are specified in Article 54 of the Social Insurance Law of 2014, amended by point a of clause 1, Article 219, of the Labor Code of 2019 as follows:
Conditions for Receiving a Pension
1. Workers as stipulated in points a, b, c, d, g, h, and i of clause 1, Article 2 of this Law, except as specified in clause 3 of this Article, upon retirement with 20 years or more of social insurance contributions, are eligible for a pension if they meet one of the following conditions:
a) Reached the age specified in clause 2, Article 169 of the Labor Code;
b) Reached the age specified in clause 3, Article 169 of the Labor Code and had at least 15 years in heavy, hazardous, dangerous, or particularly heavy, hazardous, or dangerous jobs or worked in areas with special socio-economic difficulties, including having worked in areas with a regional allowance factor of 0.7 or more prior to January 1, 2021;
c) Workers who are at most 10 years younger than the retirement age stipulated for workers in clause 2, Article 169 of the Labor Code and have at least 15 years working in coal mining;
d) Persons infected with HIV due to occupational accidents while performing their assigned duties.
2. Workers as stipulated in points d and e of clause 1, Article 2 of this Law, upon retirement with 20 years or more of social insurance contributions, are eligible for a pension if they meet one of the following conditions:
a) Workers are at most 5 years younger than the retirement age stipulated in clause 2, Article 169 of the Labor Code, except when specified otherwise by the Law on Vietnam People's Army Officers, Law on the People's Public Security, Law on Cryptography, Law on Professional Soldiers, defense workers, and public employees;
b) Workers are at most 5 years younger than the retirement age stipulated in clause 3, Article 169 of the Labor Code and had at least 15 years in heavy, hazardous, dangerous, or particularly heavy, hazardous, or dangerous jobs or worked in areas with special socio-economic difficulties, including having worked in areas with a regional allowance factor of 0.7 or more before January 1, 2021;
c) Persons infected with HIV due to occupational accidents while performing their assigned duties.
3. Female workers who are officials at commune level or who are non-specialist workers at commune, ward, or commune-level town and participate in social insurance, upon retirement with at least 15 years but less than 20 years of social insurance contributions and reaching the retirement age stipulated in clause 2, Article 169 of the Labor Code, are eligible for a pension.
Thus, workers must meet all the above conditions to be eligible for a pension.
*Note: The retirement age conditions for certain special cases are specified by the Government of Vietnam.
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