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Regulations on the pension regime for foreign workers in Vietnam

The Labor Code 2019 of Vietnam has clearly shown the rights of Vietnamese workers. However, does the Labor Code entail foreign workers living and working in Vietnam? Would they be given the same treatment as a national worker such as healthcare, pension, etc.? For foreign workers who plan to live in Vietnam for the rest of their life, pension is one of the most important aspects that they pay attention to. So, what are the regulations on the pension regime for foreign workers in Vietnam?

Foreign workers who have acquired a work permit or practicing certificate or a practicing license issued by a competent Vietnamese authority, currently working under a labor contract entered into with an employer in Vietnam with a term of a full 1 year or more must participate in compulsory social insurance in Vietnam like every other national worker, according to Decree 143/2018/ND-CP. 

Therefore, when the foreign workers have paid social insurance contributions like every worker in Vietnam, there should be no distinction in the nature of a worker between foreign and Vietnamese national. 

However, on the other hand, the foreign workers and their businesses should remember that as the foreign workers are treated as standard Vietnamese civilians, they are also complied with following the laws of Vietnam and will be punished accordingly if they conduct a crime. 

Pension regime for foreign workers

When participating in the social insurance regime in Vietnam, foreign workers are entitled to every right that the national worker should receive, including the pension when they reach the retirement age.

Accordingly, the foreign workers will receive the pension adequated to the amount of money they contribute to the system in their working-age if they: 

  • Have paid compulsory social insurance for a full 20 years or more.
  • Have reached the retirement age as prescribed by the Labor Code.

In 2022, the male workers must be at least 60 years old and 6 months old to retire, and the female workers must be from full 55 years and 8 months. This also applied to foreign workers this year.

For the following years, the foreign workers should note that at the moment, the retirement age of men increases by 3 months/year, and the retirement age of women increases by 4 months/year to the maximum age of 62 for males in 2028 and the age of 60 for females in 2035.

The pension rate for foreign workers

The pension enjoyment rate of foreign workers will be calculated according to the following formula:

Pension = Enjoyment rate x Average monthly salary on which social insurance contributions are based

For foreign workers who are male, they enjoy the rate of 45% for 20 years of payment. After this mark, each additional year will result in a 2% increase but not more than 75%.

For foreign workers who are female, they enjoy the rate of 45% for 15 years of payment. After this mark, each additional year will result in a 2% increase but not more than 75%.

ASL LAW is the top-tier Vietnam law firm for Employment and Labor Law. If you need any advice, please contact us for further information or collaboration.

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