03 regulation that Individuals Participating in Voluntary Social Insurance Wanting to Receive a Pension in Vietnam Need to Know

03 regulation that Individuals Participating in Voluntary Social Insurance Wanting to Receive a Pension in Vietnam Need to Know  (Illustrative Image)

1. Conditions for Receiving a Pension for Individuals Participating in Voluntary Social Insurance in Vietnam

Based on Article 73 of the Law on Social Insurance 2014 (amended by point c, clause 1, Article 219 of the Labor Code 2019), individuals participating in voluntary social insurance are eligible to receive a pension when:

- They reach the retirement age as stipulated in clause 2, Article 169 of the Labor Code 2019, specifically:

+  The  retirement  age  for  workers  under  normal  working  conditions  will  be  adjusted  according  to  a  roadmap,  reaching  62  years  old  for  male  workers  in  2028  and  60  years  old  for  female  workers  in  2035.

The  retirement  age  for  workers  in  2022,  under  normal  conditions,  must  be  60  years  and  06  months  for  male  workers,  and  55  years  and  08  months  for  female  workers.

(Each  year,  the  retirement  age  increases  by  03  months  for  male  workers  and  04  months  for  female  workers.)

+  Workers  who  suffer  from  labor  capacity  reduction;  work  in  extremely  arduous,  toxic,  hazardous  conditions;  perform  heavy,  toxic,  hazardous  work;  or  work  in  areas  with  exceptionally  difficult  socio-economic  conditions  can  retire  at  a  younger  age  but  no  more  than  05  years  younger  than  the  retirement  age  for  workers  under  normal  working  conditions.

+  Workers  with  high  professional  and  technical  expertise  and  some  special  cases  can  retire  at  an  older  age  but  no  more  than  05  years  older  than  the  retirement  age  for  workers  under  normal  working  conditions.

- They have 20 years or more of social insurance contributions.

For cases where the age requirement is met as stipulated above, but the social insurance contribution period is less than 20 years, they can continue to contribute until they reach 20 years to receive a pension.

Thus, workers participating in voluntary social insurance can be eligible to receive a pension if they meet the retirement age of 60 years and 06 months for men and 55 years and 08 months for women (applicable from 2022, each year increasing by 03 months for male workers and 04 months for female workers); and have 20 years or more of social insurance contributions.

2. Application for pension for Individuals Participating in Voluntary Social Insurance in Vietnam

According to clause 2, Article 108 of the Law on Social Insurance 2014, the pension documentation for workers participating in voluntary social insurance includes:

+ Social insurance book;

+ Pension application form.

3. How to Calculate Pension for Individuals Participating in Voluntary Social Insurance

Article 3 and Article 4 of Decree 134/2015/ND-CP stipulate the monthly pension level for workers participating in voluntary social insurance as follows:

- The monthly pension is calculated by multiplying the pension rate by the average monthly income on which social insurance contributions are based, according to the following formula:

Where:

* The Pension Rate is determined as follows:

- For women: The pension rate is 45% corresponding to 15 years of social insurance contributions, after which, for each additional year of contributions, it is increased by 2%; the maximum rate is 75%;

- For men: The pension rate is 45% corresponding to 20 years of social insurance contributions from 2022 onward. After this, each additional year of contributions adds 2%; the maximum rate is 75%.

* Average Monthly Income on which Social Insurance Contributions are Based

The average monthly income on which social insurance contributions are based is calculated by averaging the monthly incomes on which social insurance contributions were based over the entire contribution period.

Where:

+ The adjusted monthly income for each year equals the monthly income on which social insurance contributions were based for that year multiplied by the adjustment rate for that respective year;

+ The adjustment rate for monthly income on which social insurance contributions are based is calculated based on the annual average consumer price index published by the General Statistics Office.

Note: In cases where individuals participating in voluntary social insurance pay a lump sum for remaining years (applicable to individuals eligible for retirement age but whose social insurance contribution period is less than 10 years, allowing them to pay for enough 20 years to receive a pension), the average monthly income on which social insurance contributions are based is calculated according to the mentioned formula, where the monthly income for the lump sum payment for the remaining years is multiplied by an adjustment rate of 1.

Bao Ngoc

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