Guidance on the determination of the Average monthly salary on which social insurance premiums are based for calculation of pension and lump-sum allowance in Vietnam

Guidance on the determination of the Average monthly salary on which social insurance premiums are based for calculation of pension and lump-sum allowance in Vietnam (Image from Internet)

1. Guidance on the determination of the Average monthly salary on which social insurance premiums are based for calculation of pension and lump-sum allowance in Vietnam

Article 62 of the 2014 Social Insurance Law prescribes the Average monthly salary on which social insurance premiums are based for calculation of pension and lump-sum allowance in Vietnam as follows:

- Employees who fall under the salary policies prescribed by the State and who have the entire period of social insurance contributions based on such salary policies, shall have their average monthly salary of the years of social insurance contributions prior to retirement calculated as follows:

+ Participated in social insurance before January 1, 1995, the average monthly salary of the last 5 years before retirement shall be calculated;

+ Participated in social insurance from January 1, 1995, to December 31, 2000, the average monthly salary of the last 6 years before retirement shall be calculated;

+ Participated in social insurance from January 1, 2001, to December 31, 2006, the average monthly salary of the last 8 years before retirement shall be calculated;

+ Participated in social insurance from January 1, 2007, to December 31, 2015, the average monthly salary of the last 10 years before retirement shall be calculated;

+ Participated in social insurance from January 1, 2016, to December 31, 2019, the average monthly salary of the last 15 years before retirement shall be calculated;

+ Participated in social insurance from January 1, 2020, to December 31, 2024, the average monthly salary of the last 20 years before retirement shall be calculated;

+ Participated in social insurance from January 1, 2025, onwards, the average monthly salary of the entire period shall be calculated.

- Employees who have the entire period of social insurance contributions based on the salary policies decided by the employer shall have their average monthly salary of the entire period of social insurance contributions calculated.

- Employees who have both periods of social insurance contributions under the salary policies prescribed by the State and periods under the salary policies decided by the employer, shall have their average monthly salary of the combined periods calculated, in which the period under the State-prescribed salary policies shall be calculated as stipulated in Clause 1, Article 62 of the 2014 Social Insurance Law.

2. Provisions on the Adjustment of salaries for which social insurance premiums have been paid in Vietnam

Article 63 of the 2014 Social Insurance Law prescribes the Adjustment of salaries for which social insurance premiums have been paid in Vietnam as follows:

- Salaries that have been used for social insurance contributions to calculate the average monthly salary for social insurance contributions for employees as defined in Clause 1, Article 89 of the 2014 Social Insurance Law shall be adjusted according to the statutory pay rate at the time of pension entitlement for employees who participated in social insurance before January 1, 2016.

For employees who began participating in social insurance from January 1, 2016, onwards, the salaries that have been used for social insurance contributions to calculate the average monthly salary for social insurance contributions shall be adjusted as stipulated in Clause 2, Article 63 of the 2014 Social Insurance Law.

- Salaries that have been used for social insurance contributions to calculate the average monthly salary for social insurance contributions for employees as defined in Clause 2, Article 89 of the 2014 Social Insurance Law shall be adjusted based on the consumer price index of each period according to the regulations of the Government of Vietnam.

To Quoc Trinh

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