Responding to the above issue, Lawyer Le Ngoc Khanh, TGS Law Firm, City Bar Association. According to Hanoi, based on Clauses 1 and 2, Article 2 of Decree 143/2018/ND-CP, foreigners working in Vietnam must participate in compulsory social insurance if they fully meet the following conditions:
- Having a work permit or practicing certificate or a practicing license issued by a competent Vietnamese authority.
- Working under a labor contract entered into with an employer in Vietnam with a term of full 01 year or more.
- Not falling into one of two cases: Moving within the enterprise; Sufficient retirement age.
When all of the above signs are present, both foreign workers and enterprises employing these workers must make monthly contributions to social insurance according to regulations.
Can foreign workers who pay compulsory social insurance enjoy a pension?
Clause 1, Article 9, Decree 143/2018/ND-CP stipulates that the employees specified in Clauses 1 and 2 of this Decree are entitled to a pension when they satisfy the conditions for pension enjoyment as prescribed in Clause 1 of this Article. 1, Article 54 of the Law on Social Insurance and Article 6 of Decree No. 115/2015/ND-CP.
Accordingly, foreign workers participating in compulsory social insurance can fully enjoy a pension if they simultaneously meet the following conditions: Paying compulsory social insurance for full 20 years or more; Having reached the retirement age in accordance with the Labor Code.
According to Article 169 of the Labor Code 2019, the retirement age of foreign workers is the same as that of Vietnamese workers. Specifically:
- In case of working under normal conditions:
+ Retirement in 2022: Male employees must be at least 60 years old and 6 months old; female employees must be from full 55 years and 8 months.
+ Retirement in the following years: The retirement age of men increases by 3 months/year, the retirement age of women increases by 4 months/year.
- In case of having full 15 years of working with heavy, hazardous or dangerous elements or having full 15 years of working in an area with extremely difficult conditions: To be entitled to retire at most 5 years earlier than school working under normal conditions.
- In case of having full 15 years of working as a coal miner in a pit: To retire up to 10 years earlier than in the case of working under normal conditions.
- In case of HIV infection due to occupational accident while performing assigned tasks: Not considering retirement age.
Regarding the pension enjoyment rate of foreigners, Point a, Clause 2, Article 9, Decree 143/2018/ND-CP stipulates the pension enjoyment for foreign employees as follows:
The monthly pension rate shall comply with the provisions of Clause 2, Article 56 of the Law on Social Insurance and Clauses 1 and 2, Article 7 of Decree No. 115/2015/ND-CP;
According to this regulation, the pension enjoyment rate of foreign workers will be calculated according to the following formula:
Pension = Benefit rate x Average monthly salary on which social insurance premiums are based
- The rate of pension enjoyment of foreign workers is determined according to the time of participation in social insurance as follows:
+ Male employees who have paid social insurance premiums for 20 years are entitled to the rate of 45%, then for each additional year, they will be charged an additional 02% but not exceeding 75%.
+ Female employees who have paid social insurance premiums for 15 years are entitled to the rate of 45%, then for each additional year, they will be charged an additional 02% but not exceeding 75%.
- Average monthly salary on which social insurance premiums are based = Total monthly salary for which social insurance premiums have been paid: Total number of months in which social insurance premiums have been paid.
The salary paid for social insurance will be multiplied by the coefficient of slippage before calculating the average monthly salary on which social insurance premiums are based.
For example, Mr. Smith has French nationality, worked in Vietnam with 22 years of paying compulsory social insurance. His average monthly salary for social insurance contributions is 15 million VND/month.
When he retires, Mr. Smith will receive the following monthly pension:
- Regarding the rate of benefit:
20 years of paying social insurance = 45%
The remaining 02 years of paying social insurance premiums = 02 x 02% = 04%
Accordingly, Mr. Smith enjoys the retirement rate = 45% + 04% = 49%.
Pension rate = 49% x 15 million VND = 7.35 million VND.