New law to take effect on January 1, 2016.
In 2016 and 2017 retirees will receive a monthly pension equal to 45 per cent of the average monthly salary when having paid social insurance for 15 working years. Those having worked more than 15 years will receive an additional 2 per cent (for men) and 3 per cent (for women) for every extra year they worked, until the amount reaches 75 per cent of the monthly salary.
In addition, if retirees paid social insurance for 30 years or more, when starting the 31st year he or she will receive another 0.5 times the average monthly salary.
The Law on Social Insurance will take effect starting on January 1 2016, with people retiring in 2016 and 2017 being unaffected.
In 2018, men who are eligible to retire will receive a pension of 45 per cent of the average monthly salary when having paid social insurance for 16 working years, not 15 years. The time will change to 17 years, 18 years and 19 years in 2019, 2020 and 2021, respectively. Starting in 2022 the time will be 20 years, with an additional working year seeing them receive an additional 2 per cent of the average monthly salary, to a maximum of 75 per cent.
For women, the minimum working years will remain at 15. However, starting in 2018 they will receive an additional 2 per cent instead of 3 per cent, as currently.
Where employees have reached the eligible retirement age without having paid social insurance for the maximum time they can voluntary pay the insurance so they receive 75 per cent of average monthly salary.
“Extending the period for paying insurance and adjusting the pension method are necessary steps,” said Mr. Bui Sy Loi, Deputy Chairman of the National Assembly’s Social Issues Committee. “The retirement age in Vietnam (60 years for men and 55 years for women) is one of the lowest in the world. This makes the period for paying social insurance quite short, while life expectancy is increasing, causing the time they receive a pension to be longer.”