Who will be eligible for early retirement in Vietnam?

What are regulations on retirement age roadmap for employees in Vietnam?

According to Clause 2, Article 169 of the 2019 Labor Code, the retirement age is regulated as follows:

Retirement Age

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2. Retirement ages of employees in normal working conditions shall be gradually increased to 62 for males by 2028 and 60 for females in 2035.

From 2021, the retirement ages of employees in normal working conditions shall be 60 yeas 03 months for males and 55 years 04 months for females, and shall increase by 03 months for males and 04 months for females after every year.

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According to Article 4 of Decree 135/2020/ND-CP, regulations on retirement age under ordinary working conditions are as follows:

Retirement age under ordinary working conditions

Retirement ages of employees under ordinary working conditions as prescribed in clause 2 Article 169 of the Labor Code are specified as follows:

1. Since January 1, 2021, the retirement age of employees under ordinary working conditions are 60 years 3 months for male employees and 55 years 4 months for female employees; and the age increases by 3 months for male employees each successive year until he reaches 62 in 2028 and increases by 4 months for female employees each successive year until she reaches 60 in 2035.

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According to this Article in Vietnam, currently the retirement age of employees is implemented according to the following schedule:

[1] For male employees: adjusted according to the roadmap, each year increasing by 03 months from January 1, 2021 until reaching 62 years old in 2028

[2] For female employees: adjusted according to the roadmap, each year increasing by 04 months from January 1, 2021 until reaching 60 years old in 2035.

Who will be eligible for early retirement in Vietnam? (Image from the Internet)

Who will be eligible for early retirement in Vietnam?

According to Clause 3, Article 169 of the 2019 Labor Code, the retirement age is regulated as follows:

Retirement Age

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3. The retirement ages of employees who suffer from work capacity reduction; doing laborious, toxic or dangerous works; working in highly disadvantaged areas may be younger by up to 05 years than the retirement ages specified in Clause 2 of this Article, unless otherwise prescribed by law.

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According to this Article, the following subjects will be eligible for early retirement:

[1] Employees with reduced working capacity;

[2] Employees performing particularly heavy, toxic or dangerous occupations or jobs;

[3] Employees doing heavy, hazardous or dangerous occupations and jobs;

[4] Employees working in areas with particularly difficult socio-economic conditions

Employees in the above cases can retire at a lower age but not more than 05 years old compared to the regulations on retirement age roadmap, Clause 2, Article 169 of the 2019 Labor Code, unless otherwise prescribed by law.

What is pension payment for early retired employees in Vietnam?

When an employee retires early and has paid enough social insurance to receive a pension, he or she will receive a pension according to the following regulations:

According to Clause 1, Article 7, Decree 115/2015/ND-CP stipulates the monthly pension level as follows:

Monthly pension level

The monthly pension prescribed in Article 56 of the Law on Social insurance as follows:

1. The monthly pension of an employee equals his monthly pension rate multiplied by (x) the average monthly salary as the basis for social insurance payment.

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According to Article 56 of the Law on Social Insurance 2014, the monthly pension benefits are as follows:

Monthly pension level

1. From the effective date of this Law to January 1, 2018, the monthly pension of employees who fully satisfy the conditions specified in Article 54 of this Law must equal 45% of the average monthly salary on which social insurance premiums are based as prescribed in Article 62 of this Law, corresponding to 15 years of social insurance premium payment, which shall be added with 2%, for men, or 3%, for women, for each additional year of social insurance premium payment, but must not exceed 75%.

2. Since January 1, 2018, the monthly pension of employees who fully satisfy the conditions specified in Article 54 of this Law will equal 45% of the average monthly salary on which social insurance premiums are based as prescribed in Article 62 of this Law, and correspond to the following period of social insurance premium payment:

a/ For male employees who retire in 2018, 2019, 2020 and 2021 and since 2022, it is 16 years, 17 years, 18 years, 19 years and 20 years, respectively;

b/ For female employees who retire since 2018, it is 15 years;

For employees defined at Points a and b of this Clause, the pension rate shall be added with 2% for each additional year of social insurance premium payment, but must not exceed 75%.

3. The monthly pension of employees who fully satisfy the conditions specified in Article 55 of this Law shall be calculated as stipulated in Clauses 1 and 2 of this Article, and reduced 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.

4. The monthly pension of female employees who fully satisfy the conditions for pension enjoyment specified in Clause 3 of Article 54 shall be calculated based on the period of social insurance premium payment and average monthly salary on which social insurance premiums are based, specifically as follows: for a period of full 15 years, the monthly pension must equal 45% of the average monthly salary on which social insurance premiums are based as specified in Article 62 of this Law; for a period of between full 16 years to under 20 years, the monthly pension shall be added with 2% for each additional year of payment.

5. The lowest monthly pension of employees covered by compulsory social insurance who fully satisfy the conditions for pension enjoyment specified in Article 54 or 55 of this Law must equal the statutory pay rate, except the cases specified at Point i, Clause 1, Article 2, and Clause 3, Article 54, of this Law.

6. The Government shall detail this Article.

According to this Article, when employees retire early and have paid full years of social insurance in Vietnam, they will receive a pension calculated according to the following formula:

Monthly pension = 45% x Average monthly salary paid for social insurance

For each year of retirement before the prescribed age, the reduction is 2%.

Best regards!