Standard and maximum pension benefits for retirees when paying social insurance contributions in Vietnam, paying social insurance contributions in Vietnam, The minimum pension benefits when retiring and eligible for pension in Vietnam, Standard and maximum pension benefits in Vietnam

Standard and maximum pension benefits for retirees when paying social insurance contributions in Vietnam

(Vietnam) When employees reach their retirement age, they would want to know about the benefits they deserve to receive when they retire. However, they do not know exactly the regulations on the pension benefits in Vietnam as this changes every year. So, what are the standard and maximum pension benefits for retirees when paying social insurance contributions in Vietnam?

According to article 54 of the Law on Social Insurance 2014, as amended by Point a, Clause 1, Article 219 of the 2019 Labor Code, employees of full age and have paid social insurance contributions for full 20 years or more are entitled to a pension in Vietnam.

In addition, as stipulated in Article 56 of the Law on Social Insurance 2014, from January 1, 2018, the monthly pension of qualified employees is calculated at 45% of the average monthly income on which social insurance contributions are based and corresponding to the number of years of paying social insurance contributions as follows:

  • Male employees will retire for 16 years in 2018; 17 years in 2019; 18 years in 2020; 19 years in 2021; 20 years from 2022 onward;
  • Female employees who retire from 2018 onwards will retire for 15 years of paying social insurance contributions.

After that, for each additional year, the female employees and male employees will receive an additional 2% of the average monthly income on which social insurance contributions are based.

The maximum rate is equal to 75% of the monthly salary on which social insurance contributions are based.

The minimum pension benefits when retiring and eligible for pension in Vietnam

According to the laws, male employees who have paid full 20 years of social insurance in Vietnam will enjoy a pension equal to 45% of the monthly salary on which social insurance contributions are based.

Standard and maximum pension benefits for retirees when paying social insurance contributions in Vietnam
Standard and maximum pension benefits for retirees when paying social insurance contributions in Vietnam

The pension of female employees who are eligible for retirement in 2022 is 45% of the monthly salary on which social insurance contributions are based if they have paid the full 15 years of social insurance in Vietnam.

After that, for each additional year of paying social insurance contributions, an additional 2% will be added to the 45% ratio, getting to the maximum of 75%.

Accordingly, the female employees who are eligible to retire in 2022 and fully pay 20 years of social insurance (5 years addition to the required 15 years) will receive a pension at the rate of 45% + (2% x 5) = 55% of the monthly salary on which social insurance is paid.

However, for male employees, if they retire in 2022 and fully pay 20 years of social insurance, they will only get a pension at the rate of 45% of the monthly salary on which social insurance is paid.

Maximum pension benefits for employees in 2022 in Vietnam

The 20 years mark for male employees and 15 years mark for female employees is only the number of years required to contribute to the social insurance funds to enjoy pension benefits. 

The employees are always recommended to work and pay the social insurance past these marks.

So, if the employees did work past these thresholds, when will they enjoy maximum pension benefits in Vietnam?

The minimum or standard pension benefits in Vietnam are 45% and the maximum pension benefits in Vietnam are 75%. 

Accordingly, the employees can work their way through the 30% difference with 15 years of further services to the country (1 additional year equals 2%)

This means that in addition to the required age to enjoy pension, male employees will have to work and pay 35 years of social insurance contributions to enjoy the maximum pension benefits in Vietnam.

As for female employees, they will have to pay full 30 years of social insurance contributions to receive the maximum pension.

Note: In case the employee participates in compulsory social insurance but retires before the age due to a decrease in working capacity, the pension enjoyment rate will be deducted. Specifically, for each year of retirement before the prescribed age, the reduction is 2%. 

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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