Supplementary Retirement Insurance: What is it? Which individuals will participate in Supplementary Retirement Insurance from July 01, 2025?
What is supplementary retirement insurance? Who will participate in supplementary retirement insurance from July 1, 2025?
Based on Article 3 of the Social Insurance Law 2024, the regulations are as follows:
Article 3. Terminology Explanation
In this Law, the following terms are understood as follows:
- Social insurance is the assurance to replace or compensate part of the income of those participating in social insurance when they have reduced or lost income due to illness, maternity, labor accidents, occupational diseases, retirement, or death, based on contributions to the social insurance fund or guaranteed by the state budget.
- Social pension is a type of social insurance ensured by the state budget for the elderly who meet conditions as prescribed in this Law.
- Mandatory social insurance is a type of social insurance organized by the state, where employees and employers under the subjects of mandatory social insurance must participate.
- Voluntary social insurance is a type of social insurance organized by the state, where Vietnamese citizens voluntarily participate and can choose the level of contribution and method of contribution suitable to their income.
5. Supplementary retirement insurance is a type of voluntary insurance based on market principles to supplement pensions in mandatory social insurance, with a fund creation mechanism from contributions by employers or both employers and employees.
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Based on Article 124 of the Social Insurance Law 2024, the regulations on subjects participating in supplementary retirement insurance are:
Article 124. Subjects participating in supplementary retirement insurance
The subjects participating in supplementary retirement insurance are employers and employees.
Thus, supplementary retirement insurance is a type of voluntary insurance based on market principles to supplement pensions in mandatory social insurance, with a fund creation mechanism from contributions by employers or both employers and employees.
From July 1, 2025, the subjects participating in supplementary retirement insurance are employers and employees.
What is supplementary retirement insurance? Who will participate in supplementary retirement insurance from July 1, 2025? (Image from the Internet)
What are the 04 principles of supplementary retirement insurance?
Based on Article 125 of the Social Insurance Law 2024, the principles of supplementary retirement insurance are as follows:
- The level of contribution to supplementary retirement insurance is voluntarily agreed upon by employers and employees.
- Contributions to the supplementary retirement insurance fund are managed according to individual retirement accounts.
- The management of the supplementary retirement insurance fund is conducted under principles of transparency and must ensure investment compliance with the law.
- The payment level of supplementary retirement insurance is determined based on the balance of individual retirement accounts at the time of payment, accumulated through investment activities of the supplementary retirement insurance fund based on market principles.
What sources form the supplementary retirement insurance fund?
Based on Article 126 of the Social Insurance Law 2024, the formation of the supplementary retirement insurance fund is regulated as follows:
Article 126. Supplementary retirement insurance fund
- The supplementary retirement insurance fund is an independent financial fund from the state budget; it is accounted, audited, and reported financially according to the laws on accounting and auditing.
2. The sources forming the supplementary retirement insurance fund include contributions from employers, employees, and the returns on the fund's investment activities.
- The supplementary retirement insurance fund is used to pay supplementary pensions for employees, organizational, and managerial costs.
According to the above regulations, the supplementary retirement insurance fund is formed from contributions by employers, employees, and the returns on the fund's investment activities.
* The Social Insurance Law 2024 is effective from July 1, 2025
