Guidance for Officials and Public Employees, Employees in Vietnam to Fully Receive Pensions When Conditions Are Not Met

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According to the current regulations, to be eligible for the full pension rate upon retirement, employees in Vietnam must meet both conditions regarding retirement age and the number of years they have paid social insurance contributions. To be specific, officials and public employees and employees in Vietnam must have at least 20 years of social insurance contributions and be at least 60 years old for men and 55 years old for women upon retirement. If an employee retires before the stipulated age, their pension rate will be reduced by 2% for each year they retire early. However, the law also stipulates 05 cases in which officials and public employees and employees can retire early without any reduction in their pension rate, provided they meet certain conditions.

See detailed information on the 05 cases of early retirement with full pension rates HERE.

The issue here is, what should officials and public employees and employees do if they do not meet the retirement conditions as stipulated and do not fall into the 5 cases of early retirement mentioned above, in order to enjoy the full pension rate upon retirement? The editorial team at THU KY LUAT addresses this issue for each specific case as follows:

1. Case of employees of retirement age but not sufficient years of Social Insurance (SI) contributions in Vietnam

According to Clause 2, Article 9 of Decree 134/2015/ND-CP and Article 8 of Circular 01/2016/TT-BLDTBXH, in this case, if an employee wants to receive a pension, they need to pay voluntary SI for the remaining years but not exceeding 10 years.

In the case that the employee has met the retirement age but still lacks more than 10 years of SI contributions, they can continue to pay voluntary SI until the remaining contribution years are not more than 10 years according to one of the following methods:

- Monthly payment;

- Quarterly payment (every 3 months);

- Biannual payment (every 6 months);

- Annual payment;

- A lump sum payment for multiple years in the future but not exceeding 5 years per payment.

Afterward, make a one-time payment for the remaining years (not exceeding 10 years) to receive the pension.

2. Case of employees with sufficient SI contribution years but not the retirement age in Vietnam

In this case, if the employee does not want to receive a one-time SI payment, they can reserve the SI contribution period until they reach retirement age and then follow the prescribed procedures to receive the pension.

For those who have reserved SI but return to work and have not yet reached retirement age (subject to compulsory SI contributions), the working periods with SI contributions afterwards are added to the reserved SI period to calculate and enjoy SI policies.

Note, employees are only allowed to receive a one-time SI payment in the following cases:

- They have met the retirement age requirements according to Clauses 1, 2, and 4, Article 54 of the Law on Social Insurance 2014 but have not completed 20 years of SI contributions, or according to Clause 3, Article 54 of the Law on Social Insurance 2014 but have not completed 15 years of SI contributions and do not continue voluntary SI contributions;

- They are going abroad to settle permanently;

- They are suffering from life-threatening diseases such as cancer, paralysis, cirrhosis ascites, leprosy, severe lung disease, HIV that has transitioned to AIDS, and other diseases as prescribed by the Ministry of Health;

- Employees specified at points dd and e, Clause 1, Article 2 of the Law on Social Insurance 2014 who are demobilized, discharged, or resign without meeting retirement benefit criteria.

3. Case of employees neither meeting retirement age nor sufficient SI contribution years in Vietnam

In this scenario, to receive a pension, the employee needs to reserve the SI contribution period according to Article 61 of the Law on Social Insurance 2014 while also making voluntary SI contributions to complete 20 years of SI as stipulated in Clause 2, Article 9 of Decree 134/2015/ND-CP.

Note: From 2021, the conditions for employees to receive pensions will be stricter. To be specific, according to Point a, Clause 1, Article 219 of Labor Code 2019 amending Article 54 of the Law on Social Insurance 2014, from 2021, employees must have at least 20 years of SI contributions; men must be 60 years and 3 months old; women must be 55 years and 4 months old, and then gradually increase by 3 months for men and 4 months for women annually until 2028, when men can retire at 62 years old and women at 60 years old by 2035.

Nguyen Trinh

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