Regulations on Early Retirement Due to Reduced Work Capacity in Vietnam

18:16, 10/07/2024

According to current regulations, employees in Vietnam will be entitled to a pension after having contributed to social insurance for 20 years or more and being 60 years or older for men, and 55 years or older for women. However, in the following cases, employees will be allowed to retire early and receive a reduced pension:

Reduced working capacity from 61% to 80% and meeting the age conditions according to the table below:

Year of retirement	Age requirement for men	Age requirement for women
2016	51 years old	46 years old
2017	52 years old	47 years old
2018	53 years old	48 years old
2019	54 years old	49 years old
From 2020 onwards	55 years old	50 years old

Reduced working capacity of 81% or more and men aged 50, women aged 45.
Reduced working capacity of 61% or more and having 15 years or more working in particularly heavy, hazardous, or dangerous occupations or jobs as listed by the Ministry of Labor, War Invalids, and Social Affairs of Vietnam and the Ministry of Health of Vietnam.
Reduced working capacity of 61% or more and men aged 50, women aged 45 or older for employees specified at points dd and e, clause 1, Article 2 of the 2014 Social Insurance Law.
Reduced working capacity of 61% or more and having 15 years or more working in particularly heavy, hazardous, or dangerous occupations or jobs as listed by the Ministry of Labor, War Invalids, and Social Affairs and the Ministry of Health for employees specified at points dd and e, clause 1, Article 2 of the 2014 Social Insurance Law.

Thus, for these cases, to retire early, employees must undergo an assessment of reduced working capacity with a minimum reduction of 61%.

According to Article 7 of Decree 115/2015/ND-CP, the monthly pension of the employee is calculated by multiplying the monthly pension rate by the average monthly salary on which social insurance premiums are based.

The monthly pension rate of employees from January 1, 2018, is calculated as 45% corresponding to the number of years of social insurance contributions as follows:

Female employees	Retirement from 2018	15 years	Thereafter, each additional year is calculated an extra 2%, up to a maximum of 75%
Male employees	Retirement in 2018	16 years
	Retirement in 2019	17 years
	Retirement in 2020	18 years
	Retirement in 2021	19 years
	Retirement from 2022	20 years

For those retiring early due to reduced working capacity, the monthly pension is also calculated according to the above provisions, and for each year of early retirement, the rate is reduced by 2%.

If the retirement age has a remainder of up to 6 months, the reduction is 1%; if more than 6 months, the percentage is not reduced due to early retirement.

In addition, according to the provisions of Article 58 of the 2014 Social Insurance Law, employees with a social insurance contribution period exceeding the corresponding number of years for a 75% pension rate will also receive a one-time allowance upon retirement.

The one-time allowance is calculated according to the number of years of social insurance contributions exceeding the corresponding number of years for a 75% pension rate, with each year of social insurance contributions being equivalent to 0.5 months of the average monthly salary on which social insurance premiums are based.

Nguyen Trinh

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