Pension – Conditions & How to calculate

1. Conditions for pension enjoyment:

• For men: being full 60 years old, for women: being full 55 years old, who have paid social insurance premiums for at least a full 20 years.
• No age limit for people living with HIV/AIDS due to occupational accidents.
• The Government stipulates the conditions for pension entitlement age in some special cases.

In the above cases, the employee will be entitled to a monthly pension with:

Pension =Rate of pension entitlement (%) x Average monthly salary paid for social insurance

In which:

Retiring from January 1st, 2018:

Women: The rate of pension entitlement = 45% + (Duration of social insurance participation – 15 years) x 2%.

Men:

+ Retire from 01/01/2018: Pension rate = 45% + (Social insurance participation period – 16 years) x 2%.

+ Retire from 01/01/2019: Pension rate = 45% + (Social insurance participation period – 17 years) x 2%.

+ Retire from 01/01/2020: Pension rate = 45% + (Social insurance participation period – 18 years) x 2%.

+ Retire from 01/01/2021: Pension rate = 45% + (Duration of social insurance participation – 19 years) x 2%.

+ Retire from 01/01/2022: Pension rate = 45% + (Duration of participation in social insurance – 20 years) x 2%.

Then add 2% more in every following year.

Note: The rate of pension entitlement does not exceed 75%.

2. How to calculate the average monthly salary paid for social insurance:

3. Lump-sum allowance upon retirement:

– Employees who have paid social insurance premiums for a period exceeding the number of years corresponding to the 75% pension rate are entitled to not only pension but also a lump sum allowance upon retirement.

– The lump-sum allowance level shall be calculated based on the number of years of social insurance premium payment in excess of the number of years corresponding to the 75% pension rate, with half of the average monthly salary on which social insurance premiums are based for each of these years.

Example: The employee (Mr. A) works in normal conditions and in 2020, he reaches the retirement age (60 years old). Up to the time of retirement, Mr. A has 31 years of social insurance payment.

Mr. A’s monthly pension rate is calculated: = 45% (31-18) * 2% = 71%

So Mr. A’s monthly pension will be equal to 71% of the average monthly salary paid for social insurance premiums.

Suppose the average monthly salary of Mr. A’s social insurance is 20,000,000vnd.

So, the monthly pension Mr. A receives is: 20,000,000 x 71% = 14,200,000vnd.