Vietnam: Amending conditions for pension for employees suffering from work capacity reduction from January 01, 2021

From January 01, 2021, the Labor Code 2019 of Vietnam will officially take effect. According to this Law, conditions for pension for employees suffering from work capacity reduction will be changed significantly.

điều kiện hưởng lương hưu, Bộ Luật lao động 2019

Specifically, according to Clause 3 Article 169 of the Labor Code 2019 of Vietnam, the retirement ages of employees who suffer from work capacity reduction; doing laborious, toxic or dangerous works; working in highly disadvantaged areas may be younger by up to 05 years than the retirement ages of employees in normal working conditions, unless otherwise prescribed by law.

Retirement ages of employees in normal working conditions from 2021:

- 60 years 03 months for males

- 55 years 04 months for females.

The retirement ages shall increase by 03 months for males and 04 months for females after every year to 62 for males by 2028 and 60 for females in 2035.

Concurrently, regulation on conditions for pension for employees of Clause 3 Article 169 of the Labor Code 2019 of Vietnam is also detailed in Decree No. 135/2020/NĐ-CP of Vietnam’s Government as follows:

- An employee, in any of the following circumstances, may retire at the age earlier but not exceeding 5 years before the statutory retirement age in normal working conditions, determined until the retirement date, unless otherwise prescribed by law:

+ He/she has at least 15 years’ doing laborious, toxic and dangerous occupations or highly laborious, toxic and dangerous occupations on the lists of the Minister of Labor, War Invalids and Social Affairs.

+ He/she has at least 15 years’ working in highly disadvantaged areas, including the period he/she works in areas with the region-based allowance of at least 0.7 before January 01, 2021;

+ His/her work capacity reduction is at least 61%.

+ He/she has at least total 15 years’ doing the occupations specified in point a and working in the areas specified in point b Clause 1 Article 5 of Decree No. 135/2020/NĐ-CP.

The lowest retirement ages of employees suffering from work capacity reduction are specified as follows:

Male employees

Female employees

Retirement year

Lowest retirement age

Retirement year

Lowest retirement age

2021

55 years 3 months

2021

50 years 4 months

2022

55 years 6 months

2022

50 years 8 months

2023

55 years 9 months

2023

51 years

2024

56 years

2024

51 years 4 months

2025

56 years 3 months

2025

51 years 8 months

2026

56 years 6 months

2026

52 years

2027

56 years 9 months

2027

52 years 4 months

From 2028

57 years

2028

52 years 8 months

 

 

2029

53 years

 

 

2030

53 years 4 months

 

 

2031

53 years 8 months

 

 

2032

54 years

 

 

2033

54 years 4 months

 

 

2034

54 years 8 months

 

 

From 2035

55 years

Note: The month and year of birth of the employee corresponding to retirement age mentioned in this clause shall be determined as prescribed in Appendix II appended to Decree No. 135/2020/NĐ-CP of Vietnam’s Government.

Besides, regulation on conditions for pension for employees suffering from work capacity reduction of Article 55 of the Law on Social Insurance 2014 of Vietnam is also detailed in Point b Clause 1 Article 219 of the Labor Code 2019 of Vietnam as follows:

- An employee resigns after having paid social insurance for at least 20 years will receive a lower retirement pension than the rate specified in Points a, b, c Clause 1 Article 54 of this Law if:

+ His/her age is younger than the retirement age specified in Clause 2 Article 169 of the Labor Code 2019 by up to 05 years and he/she suffers from 61% to under 81% work capacity reduction (Current regulation: Only men who are full 55 years old and women who are full 50 years old will be eligible to pension when suffering a working capacity decrease of 61% or more);

+ His/her age is younger than the retirement age specified in Clause 2 Article 169 of the Labor Code 2019 by up to 10 years and he/she suffers from at least 81% work capacity reduction (Current regulation: Only men who are full 50 years old and women who are full 45 years old will be eligible to pension when suffering a working capacity decrease of 81% or more);

+ He/she has at least 15 years’ doing laborious, toxic and dangerous occupations or highly laborious, toxic and dangerous occupations on the lists of the Minister of Labor, War Invalids and Social Affairs and suffers from at least 61% work capacity reduction (Current regulation: Suffering a working capacity decrease of 61% or more and having full 15 years doing extremely heavy, hazardous or dangerous occupations or jobs on the list jointly issued by the Ministry of Labor, War Invalids and Social Affairs and the Ministry of Health).

- An employee mentioned in Points dd and e Clause 1 Article 2 of the Law on Social Insurance 2014 of Vietnam resigns after having paid social insurance for at least 20 years and suffers from at least 61% work capacity reduction will receive a lower retirement pension than the rate specified in Points a and b Clause 2 Article 54 of the Law on Social Insurance 2014 of Vietnam if:

+ His/her age is younger than the retirement age specified in Clause 2 Article 169 of the Labor Code 2019 by up to 10 years;

+ He/she has at least 15 years’ doing highly laborious, toxic and dangerous occupations on the lists of the Minister of Labor, War Invalids and Social Affairs.

Thus, the conditions for pension enjoyment from January 01, 2021 on early retirement due to suffering from work capacity reduction will change in the direction of increasing early retirement ages.

Thuy Tram

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