From 2021, How is retaining the Social Insurance contribution period affect pensions in Vietnam?

From 2021, How is retaining the Social Insurance contribution period affect pensions in Vietnam? (Illustrative image)

Retaining the time of social insurance contribution does not affect the retirement pension in Vietnam

According to Article 61 of the Law on Social Insurance, it is stipulated that workers who leave their jobs without qualifying for retirement benefits are entitled to retain their social insurance contribution period. The social insurance contribution period is calculated from the time the worker starts contributing to social insurance until they stop. In case the worker has noncontinuous social insurance contributions, the total contribution period is the sum of all the periods they have paid.

In addition, Clause 3, Article 59 of the Social Insurance Law stipulates that the time to enjoy retirement pension for those retaining the social insurance contribution period is the time specified in the proposal document of the worker who qualifies for retirement pension benefits according to the regulations.

Article 56 of the Social Insurance Law stipulates that the monthly retirement pension of a worker who meets the conditions specified for retirement pension is calculated at 45% of the average monthly wage on which social insurance contributions are based, corresponding to the following specific years:

- Male workers retiring in 2020: 18 years, in 2021: 19 years, from 2022 onwards: 20 years;- Female workers retiring from 2018 onwards: 15 years;- Each additional year adds 2% more; the maximum is 75%.

For workers enjoying retirement pension due to reduced working capacity, the monthly retirement pension is calculated as above, then reduced by 2% for each year of early retirement. If the retirement period has an odd period of up to 6 months, the reduction is 1%; over 6 months, there is no percentage reduction for early retirement.

For female workers who are commune-level officials or non-specialized officials at communes, wards, and commune-level towns, the monthly retirement pension is calculated based on their social insurance contribution period and the average monthly wage on which social insurance contributions are based as follows: 15 years of social insurance contributions equals 45% of the average monthly wage. From 16 years to under 20 years of social insurance contributions, each additional year adds 2%.

Thus, retaining the time of social insurance contribution does not affect the worker's retirement pension. However, attention should be paid to the changing conditions for retirement pension benefits from 2021**.**

03 Cases of Retaining Social Insurance Contribution Time in Vietnam

Case 1: Not meeting the retirement pension conditions

According to Article 61 of the Social Insurance Law, it is stipulated that workers who leave their jobs without meeting the conditions for retirement pensions specified in Article 54 and Article 55 of the Social Insurance Law are entitled to retain their social insurance contribution period.

Specifically: in Article 54 and Article 55 of the Social Insurance Law amended by Article 219 of the Labor Code 2019, the conditions for retirement pension are as follows:

- For officials and public employees participating in mandatory social insurance who leave their jobs with 20 or more years of social insurance contributions, they are entitled to a retirement pension if they meet one of the following conditions:

-  Male  60  years  and  3  months  old;  female  55  years  and  4  months  old.  Each  year  thereafter,  increase  by  3  months  for  male  workers  and  4  months  for  female  workers;

-  Workers  with  reduced  working  capacity;  doing  heavy,  hazardous,  and  dangerous  jobs;  working  in  especially  difficult  economic  and  social  conditions:  male  55  years  and  3  months  old;  female  50  years  and  4  months  old;

-  Male  55  years  and  3  months  old;  female  50  years  and  4  months  old  and  with  15  years  of  heavy,  hazardous,  and  dangerous  jobs  or  especially  strenuous,  toxic,  and  dangerous  jobs  on  the  list  issued  by  the  Ministry  of  Labor,  Invalids,  and  Social  Affairs  or  with  15  years  of  work  in  especially  difficult  economic  and  social  conditions  including  the  time  with  regional  allowance  coefficient  of  0.7  or  higher  before  January  1,  2021;

-  Male  50  years  and  3  months  old;  female  45  years  and  4  months  old  and  with  15  years  of  coal  mining  in  pits;

-  Persons  infected  with  HIV  due  to  occupational  accidents  while  performing  assigned  tasks.

- For female workers who are commune-level officials or non-specialized officials at communes, wards, and commune-level towns, participating in social insurance when leaving their jobs with 15-20 years of social insurance contributions and meeting the above retirement age conditions are entitled to a retirement pension.

- For officers, professional soldiers of the People's Army; officers, professional non-commissioned officers, technical non-commissioned officers of the People's Public Security; persons working in cipher agencies paid as soldiers; non-commissioned officers and soldiers of the People's Army; non-commissioned officers and soldiers of the People's Public Security serving for a definite period; military, public security, cipher trainees enjoying living expenses who leave with 20 or more years of social insurance contributions are entitled to a retirement pension if they meet one of the following conditions:

-  Male  55  years  and  3  months  old,  female  50  years  and  4  months  old,  except  in  cases  of  the  Law  on  Officers  of  the  Vietnam  People's  Army,  the  Law  on  People's  Public  Security,  the  Law  on  Cipher,  the  Law  on  Professional  Soldiers,  defense  workers,  and  public  employees  stipulate  otherwise;

-  Male  50  years  and  3  months  old,  female  45  years  and  4  months  old,  and  with  15  years  of  heavy,  hazardous,  and  dangerous  jobs  or  especially  strenuous,  toxic,  and  dangerous  jobs  on  the  list  issued  by  the  Ministry  of  Labor,  Invalids,  and  Social  Affairs  or  with  15  years  of  work  in  especially  difficult  economic  and  social  conditions  including  the  time  with  regional  allowance  coefficient  of  0.7  or  higher  before  January  1,  2021;

-  Persons  infected  with  HIV  due  to  occupational  accidents  while  performing  assigned  tasks.

Case 2: Not enjoying lump-sum social insurance

Article 61 of the Social Insurance Law stipulates that workers who leave their jobs without enjoying lump-sum social insurance benefits are entitled to retain their social insurance contribution period.

Specifically, Clause 1, Article 60 of the Social Insurance Law stipulates that Vietnamese citizens participating in mandatory social insurance who request it can enjoy lump-sum social insurance if they meet one of the following conditions:

- Reaching the retirement age without 20 years of social insurance contributions;- Female workers who are specialized or non-specialized officials at communes, wards, and commune-level towns participating in social insurance who leave their jobs with 15-20 years of social insurance contributions and are 55 years old;- Settling abroad;

- Persons with severe or life-threatening diseases such as cancer, paralysis, cirrhosis, leprosy, severe tuberculosis, HIV transitioning to AIDS, and other diseases as prescribed by the Ministry of Health;

- Officers, professional soldiers of the People's Army; officers, professional non-commissioned officers, technical non-commissioned officers of the People's Public Security; persons working in cipher agencies paid as soldiers; non-commissioned officers and soldiers of the People's Army; non-commissioned officers and soldiers of the People's Public Security serving for a definite period; military, public security, cipher trainees enjoying living expenses who are discharged, demobilized, and leave who do not meet the conditions for retirement pensions.

Besides, Article 1 of the Resolution 93/2015/QH13 of the National Assembly on implementing policies for lump-sum social insurance for workers also stipulates an additional case: workers participating in mandatory social insurance after 1 year of leaving their jobs, workers participating in voluntary social insurance after 1 year of not continuing to pay social insurance contributions, and who have less than 20 years of social insurance contributions when requested.

Case 3: Stopping voluntary social insurance contributions without meeting retirement conditions

According to Clause 1, Article 78 of the Social Insurance Law, workers stopping voluntary social insurance contributions without meeting the retirement conditions specified are entitled to retain their social insurance contribution period. Clause 3, Article 3 of the Social Insurance Law stipulates that voluntary social insurance is a type of social insurance organized by the State where participants can choose the level and method of payment suitable to their income, and the State has policies to support social insurance contributions for participants to enjoy pensions and funerals. Participants in voluntary social insurance are citizens of Vietnam aged 15 and older who are not subject to mandatory social insurance.

Thus, in cases where workers do not want to continue paying social insurance but still want to enjoy a retirement pension, they can retain their social insurance participation period and wait until they qualify for retirement benefits under the regulations in Vietnam.

Le Vy

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