Can retirees get their pensions reformed? How does the pension change when the reform is implemented?
Retirees are allowed to carry out pension reforms from July 1, 2024?
According to Article 10 of Decree 115/2015/ND-CP which stipulates wages as follows:
Adjustment of wages that have contributed to social insurance
The adjustment of wages that have contributed to social insurance under Article 63 of the Law on Social Insurance is stipulated as follows:
1. Wages that have contributed to social insurance as a basis for determining the average monthly wage for social insurance contributions for workers under the salary policies regulated by the State are adjusted according to the statutory pay rate at the time of enjoying the policies for workers who started participating in social insurance before January 1, 2016.
For workers who started participating in social insurance from January 1, 2016, the adjustment of wages that have contributed to social insurance as a basis for determining the average monthly wage for social insurance contributions is adjusted according to Clause 2 of this Article.
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According to the above regulation, currently, for workers under the salary policies regulated by the State who started participating in social insurance before January 1, 2016, the wages that have contributed to social insurance as a basis for determining the average monthly wage for social insurance contributions will be adjusted according to the statutory pay rate at the time of enjoying the policies.
Therefore, if the 2024 salary reform implements the abolition of the statutory pay rate, determining the wages that have contributed to social insurance as a basis for determining the average monthly wage for social insurance contributions for these subjects will encounter inconsistencies compared to the current regulations.
Besides, the Minister of Labor, Invalids and Social Affairs has made statements regarding salary reform also needing to consider salaries for retirees and social protection subjects.
"Currently, pensions are paid according to the statutory pay rate. When the statutory pay rate is abolished from July 1, 2024, how will the salary of retirees be calculated? Will retirees be subject to salary reform along with the public sector, and if so, by how much will it increase?"
"Therefore, I propose that public sector salary reform must be accompanied by corporate sector salary reform and appropriately adjust salaries for retirees and other social subjects," emphasized the Minister of Labor, Invalids and Social Affairs.
From July 1, 2024, salary reform will be implemented, meaning the statutory pay rate will be abolished at that time. Simultaneously, pension policies for retirees may also be adjusted to conform to new salary reform regulations.
Thus, if there are no changes, from July 1, 2024, when salary reform for officials and public employees, armed forces, and workers in enterprises is implemented, the salary for retirees will also be adjusted accordingly.
Source: Government of Vietnam Newspaper
Retirees allowed to reform their pensions? How will pensions change with the reform?
What is the retirement age for workers under normal conditions?
Based on Article 169 of the Labor Code 2019 regulations as follows:
Retirement Age
1. Workers who meet the conditions for social insurance contributions as prescribed by the law on social insurance are entitled to a pension when they reach the retirement age.
2. The retirement age of workers under normal working conditions will be adjusted gradually until reaching 62 for men by 2028 and 60 for women by 2035.
From 2021, the retirement age for workers under normal working conditions will be 60 years 3 months for men and 55 years 4 months for women; thereafter, it will increase by 3 months each year for men and 4 months each year for women.
3. Workers with reduced working capacity; doing particularly heavy, toxic, and dangerous jobs; doing heavy, toxic, and dangerous jobs; working in areas with exceptionally difficult socio-economic conditions may retire at a lower age but not more than 5 years compared to the regulation in Clause 2 of this Article at the time of retirement, except as otherwise provided for by law.
4. Workers with high technical specializations and certain special cases may retire at a higher age but not more than 5 years compared to the regulation in Clause 2 of this Article at the time of retirement, except as otherwise provided for by law.
5. The Government of Vietnam specifies this Article in detail.
The current retirement age for workers under normal conditions is 60 years 9 months for men and 56 years for women.
How will pensions change with the reform?
The Prime Minister of the Government of Vietnam stated that the Government of Vietnam will implement salary policy reform for the public sector according to Resolution 27-NQ/TW of 2018 from July 1, 2024.
At the same time, the Government of Vietnam will continue adjusting the regional minimum wage and salary policies for the corporate sector according to regulations.
From 2025 onwards, salary adjustments will continue, averaging 7% per year for officials and public employees, and the armed forces, until the lowest salary is at least equal to or higher than the regional minimum wage of region I of the corporate sector.
Currently, Clause 1 of Article 7 of Decree 115/2015/ND-CP stipulates how to calculate pensions as follows:
| Monthly Pension = Monthly Benefit Rate x Average Monthly Wage Contributed to Social Insurance || --- |
According to the above regulation, pensions are calculated based on the benefit rate and the average monthly wage contributed to social insurance.
In cases of receiving new wages (increased according to salary reform) and retiring after the salary reform is implemented, the average monthly wage contributed to social insurance will increase.
When the salary reform is implemented from July 1, 2024, if the method of calculating pensions remains unchanged, the monthly benefit rate remains unchanged, and the average monthly wage contributed to social insurance increases, then the pension will also increase accordingly.
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