What are allowances for employees who are eligible for early retirement in Vietnam?

1. Early Retirement as Prescribed in Article 54 of Social Insurance Law 2014 in Vietnam:

Pension = Pension rate x Average Monthly Salary for Social Insurance Contribution

Details as follows:

* Pension rate is calculated as follows:

- For early retirement before January 1, 2018

+ For Men: Pension rate = 45% + (Time participating in social insurance - 15 years) x 2%

+ For Women: Pension rate = 45% + (Time participating in social insurance - 15 years) x 3%

- For early retirement from January 1, 2018

+ For Women: Pension rate = 45% + (Time participating in social insurance - 15 years) x 2%

+ For Men:

• Retirement from January 1, 2018: Pension rate = 45% + (Time participating in social insurance - 16 years) x 2%;

• Retirement from January 1, 2019: Pension rate = 45% + (Time participating in social insurance - 17 years) x 2%;

• Retirement from January 1, 2020: Pension rate = 45% + (Time participating in social insurance - 18 years) x 2%;

• Retirement from January 1, 2021: Pension rate = 45% + (Time participating in social insurance - 19 years) x 2%;

• Retirement from January 1, 2022: Pension rate = 45% + (Time participating in social insurance - 20 years) x 2%.

Note: The rate must not exceed 75%

* Average monthly salary for social insurance contribution (M_bqtl) is calculated as follows:

- For employees under the salary policies regulated by the State:

M_bqtl = Total salary of last T years before retirement / (T x 12 months)

- For employees under the salary policies regulated by the employer in Vietnam:

M_bqtl = Total salary for social insurance contribution / Total months of social insurance contribution

- For employees with periods of social insurance contribution under both State and employer policies:

M_bqtl = (Total salary of social insurance contribution under State policies + Total salary of social insurance contribution under employer policies) / Total months of social insurance contribution

2. Early Retirement due to Reduced Working Capacity as Prescribed in Article 55 of Social Insurance Law 2014 in Vietnam

The pension rate will be lower than the rate for those meeting the conditions prescribed in Point a and Point b, Clause 1, Article 54 of the Social Insurance Law 2014. Specifically, the monthly pension in this case is calculated based on the monthly pension of those meeting the conditions, then reduced by 2% for each year of early retirement.

3. Early Retirement in Case of Streamlining

- Persons subject to streamlining policies aged between 50 to 53 for men, 45 to 48 for women, having at least 20 years of social insurance contribution, including at least 15 years in heavy, hazardous occupations as listed by the Ministry of Labor, Invalids and Social Affairs and Ministry of Health, or having at least 15 years working in areas with regional allowance coefficient 0.7 and above, in addition to the pension as prescribed, they are entitled to:

• No reduction in pension rate for early retirement;
• A 3-month salary allowance for each year of early retirement compared to the minimum retirement age;
• A 5-month salary allowance for the first 20 years of service with social insurance contribution. Starting from the 21st year onwards, a half-month salary allowance for each additional year of service with social insurance contribution.

- Persons subject to streamlining policies aged between 55 to 58 for men, 50 to 53 for women, having at least 20 years of social insurance contribution, are entitled to the pension as prescribed by the law on social insurance and in addition:

• No reduction in pension rate for early retirement;
• A 5-month salary allowance for the first 20 years of service with social insurance contribution. Starting from the 21st year onwards, a half-month salary allowance for each additional year of service with social insurance contribution;
• A 3-month salary allowance for each year of early retirement compared to the minimum retirement age.

- Persons subject to streamlining policies aged above 53 to under 55 for men, above 48 to under 50 for women, having at least 20 years of social insurance contribution, including at least 15 years in heavy, hazardous occupations as listed by the Ministry of Labor, Invalids and Social Affairs and Ministry of Health, or having at least 15 years working in areas with regional allowance coefficient 0.7 and above, are entitled to the pension as prescribed by the law on social insurance and no reduction in pension rate for early retirement.

- Persons subject to streamlining policies aged above 58 to under 60 for men, above 53 to under 55 for women, having at least 20 years of social insurance contribution, are entitled to the pension as prescribed by the law on social insurance and no reduction in pension rate for early retirement.

Legal Basis:- Social Insurance Law 2014

- Decree 108/2014/ND-CP

- Decree 113/2018/ND-CP

- Decree 115/2015/ND-CP

- Circular 59/2015/TT-BLDTBXH

- Thao Uyen-

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