Regulations on how to calculate pension when retiring before age

Pay pension to beneficiaries.

Vietnam Social Security has just answered questions from employees regarding how to calculate pensions when retiring early. This is the case of a civil servant, 46 years old this year, who has paid social insurance for 26 years and 5 months.

Responding to this content, Vietnam Social Security said that regarding the conditions for receiving pensions, according to current regulations, in Article 169, Clause 1, Article 219 of the 2019 Labor Code and Decree No. 135 of the Government stipulates: From January 1, 2021, the retirement age for male employees working under normal conditions will be adjusted according to the roadmap, increasing by 3 months each year until reaching 62 years old in 2028.

Specifically, the retirement age of employees who have paid social insurance for 20 years under normal working conditions is 60 years and 3 months for male employees. After that, the age will increase by 3 months each year until reaching 62 years of age in 2028.

Employees can retire no more than 5 years younger than the retirement age of employees working in normal working conditions, if they have paid social insurance for 20 years or more, and are in one of the following cases:

Employees who have worked for 15 years or more in a arduous, hazardous, or especially arduous, hazardous, or dangerous occupation or job on the list issued by the Ministry of Labor, War Invalids and Social Affairs.

Employees who have worked for 15 years or more in areas with particularly difficult socio-economic conditions (including working time in areas with regional allowance coefficients of 0.7 or higher before January 1, 2021).

Employees whose working capacity has been reduced by 61% or more.

Employees with a total working time of arduous, hazardous, or especially arduous, hazardous, hazardous work, and working time in areas with particularly difficult socio-economic conditions (including working time in areas with regional allowance coefficient of 0.7 or higher before January 1, 2021) of 15 years or more.

Employees can retire up to 10 years younger than the retirement age under normal working conditions at the time of retirement, if they meet one of the following conditions: In 20 years of paying social insurance, they must have worked in underground coal mining for 15 years; have paid social insurance for 20 years, and have a working capacity reduction of 81% or more.

Employees who have paid social insurance for 20 years and are infected with HIV/AIDS due to occupational accidents, or have a labor capacity reduction of 61% or more, and have 15 years of working in a particularly arduous or hazardous occupation or job, on the list issued by the Ministry of Labor, War Invalids and Social Affairs, are not subject to age limits.

Regarding the monthly pension, Article 56 of the Law on Social Insurance 2014 and Article 7 of Decree No. 115 of the Government stipulate that the monthly pension of employees is calculated by multiplying the monthly pension rate by the average monthly salary for social insurance contributions.

In particular, the pension rate for male employees retiring from 2022 onwards is calculated at 45% of the average monthly salary for social insurance contributions, corresponding to 20 years of contributions.

After that, each additional year of contributions is calculated by 2%. The maximum level is 75% of the average monthly salary for social insurance contributions.

In case an employee retires before the age due to reduced working capacity, the pension rate is reduced by 2% for each year of early retirement.

Because the information provided by the employee has not yet determined the conditions for early retirement (about the job title recorded in the social insurance book, health status, working conditions, exact date of birth, time of benefit...), Vietnam Social Security does not have enough basis to respond. In case of needing specific instructions, the employee needs to provide the social insurance code, or contact the Social Insurance agency where the unit is participating in social insurance, for advice and instructions./.