Are employees allowed to continue receiving a retirement pension after entering into a new employment contract in Vietnam?

Are employees allowed to continue receiving a retirement pension after entering into a new employment contract in Vietnam? (Internet image) 

Regarding this issue, LawNet would like to answer as follows:

1. Are employees allowed to continue receiving a retirement pension after entering into a new employment contract in Vietnam?

Specifically, Article 149 of the Labor Code 2019 rstipulates employment of elderly people as follows:

- When an elderly person is employed, both parties may agree on conclusion of multiple fixed-term employment contracts.

- In case a person who is receiving retirement pension under the Law on Social Insurance enters into a new employment contract, he/she shall receive salary and other benefits prescribed by law and the employment contract in addition to the benefits to which they are entitled under the pension scheme.

- Employer must not assign elderly employees to do laborious, toxic or dangerous works, or highly laborious, toxic or dangerous works that are harmful to their health, unless safety is ensured.

- Employers are responsible for taking care of the health of elderly employees at the workplace.

Thus, in case a person who is receiving retirement pension e enters into a new employment contract, he/she shall receive salary and other benefits prescribed by law and the employment contract in addition to the benefits to which they are entitled under the pension scheme.

2. Regulations on suspension from or continuation of enjoyment of pension in Vietnam

Article 64 of the Law on Social Insurance 2014 stipulates suspension from or continuation of enjoyment of pension or monthly social insurance allowance as follows:

- Persons on pension or monthly social insurance allowance shall be suspended from enjoying such pension or allowance in one of the following cases:

+ They illegally leave the country;

+ They are declared missing by the court;

+ There are grounds to confirm that their enjoyment of social insurance is illegal.

- Pension or monthly social insurance allowance must continue to be paid when emigrants legally return to reside in the country in accordance with the residence law.

In case there is a court's legally effective decision annulling the decision to declare missing, they are entitled not only to continue enjoying such pension or allowance but also to have their pension or monthly social insurance allowance retrospectively paid since the time of suspension.

- Social insurance agencies, when deciding on suspension from enjoyment of social insurance under Point c, Clause 1 of Article 64 of the Law on Social Insurance 2014, shall notify in writing and clearly state the reason. Within 30 days from the date of suspension, social insurance agencies shall issue a decision settling the enjoyment; if deciding on termination of enjoyment of social insurance, they shall clearly state the reason..

3. Monthly pension rate in Vietnam

According to Article 56 of the Law on Social Insurance 2014, the monthly pension rate is as follows:

-  From the effective date of this Law to January 1, 2018, the monthly pension of employees who fully satisfy the conditions specified in Article 54 of the Law on Social Insurance 2014 must equal 45% of the average monthly salary on which social insurance premiums are based as prescribed in Article 62 of the Law on Social Insurance 2014, corresponding to 15 years of social insurance premium payment, which shall be added with 2%, for men, or 3%, for women, for each additional year of social insurance premium payment, but must not exceed 75%.

- Since January 1, 2018, the monthly pension of employees who fully satisfy the conditions specified in Article 54 of the Law on Social Insurance 2014 will equal 45% of the average monthly salary on which social insurance premiums are based as prescribed in Article 62 of the Law on Social Insurance 2014, and correspond to the following period of social insurance premium payment:

+ For male employees who retire in 2018, 2019, 2020 and 2021 and since 2022, it is 16 years, 17 years, 18 years, 19 years and 20 years, respectively;

+ For female employees who retire since 2018, it is 15 years;

For employees defined at Points a and b of  Clauses 2 of Article 56 of the Law on Social Insurance 2014, the pension rate shall be added with 2% for each additional year of social insurance premium payment, but must not exceed 75%.

- The monthly pension of employees who fully satisfy the conditions specified in Article 55 of the Law on Social Insurance 2014 shall be calculated as stipulated in Clauses 1 and 2 of Article 56 of the Law on Social Insurance 2014, and reduced by 2% for each year of early retirement.

In case an employee’s age is short of up to 6 months compared to the retirement age, his/her pension shall be reduced by 1%; if his/her age is short of under 6 months, his/her pension shall not be reduced due to early retirement.

- The monthly pension of female employees who fully satisfy the conditions for pension enjoyment specified in Clause 3 of Article 54 of the Law on Social Insurance 2014 shall be calculated based on the period of social insurance premium payment and average monthly salary on which social insurance premiums are based, specifically as follows:

For a period of full 15 years, the monthly pension must equal 45% of the average monthly salary on which social insurance premiums are based as specified in Article 62 of the Law on Social Insurance 2014; for a period of between full 16 years to under 20 years, the monthly pension shall be added with 2% for each additional year of payment.

- The lowest monthly pension of employees covered by compulsory social insurance who fully satisfy the conditions for pension enjoyment specified in Article 54 or 55 of the Law on Social Insurance 2014 must equal the statutory pay rate, except the cases specified at Point i, Clause 1, Article 2, and Clause 3, Article 54, of the Law on Social Insurance 2014.

Ho Quoc Tuan

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