How to calculate pension when participating in compulsory social insurance in Vietnam?
Whether voluntary social insurance or compulsory social insurance represents a humane policy; the beauty of the State is always an issue that people care about. So what is the difference between compulsory social insurance and voluntary social insurance? Especially, are the modes of these two types of insurance different? Or how to calculate pension when participating in social insurance in general and compulsory social insurance in particular? With the above questions for sure; Lawyer X will consult on each issue one by one; through the article: How to calculate pension when participating in compulsory social insurance in 2022
Legal grounds
Law on Social Insurance 2014
What is social insurance?
The current; contents related to the social insurance regime are prescribed in the Law on Social Insurance 2014 and guiding documents. In Clause 1, Article 3 of the Law on Social Insurance 2014; Social insurance is defined as follows:
1. Social insurance is a guarantee to replace or partially compensate an employee’s income when he or she has a decrease or loss of income due to illness; maternity, labor accident, occupational disease, end of working age, or death; based on contributions to the social insurance fund.
The regimes on social insurance are organized and ensured by the State under the provisions of the legal system on social insurance to ensure the life of the participants.
How to calculate a pension when participating in compulsory social insurance?
Under Article 56 of Law on Social Insurance 2014; employees are eligible for a monthly pension and retire from 2022 onward; The monthly pension is as follows:
– Male employees: Equal to 45% of the average monthly salary on which social insurance premiums are based and equivalent to 20 years of paying social insurance premiums; then every year; employees are charged 2% more; up to 75%.
– Female employees: Equal to 45% of the average monthly salary on which social insurance premiums are based and equivalent to 15 years of paying social insurance premiums; then every year; employees are charged 2% more; up to 75%.
The employee’s monthly pension when working capacity is reduced is calculated as prescribed above; then, for each year of retirement before the prescribed age, the reduction is 2%.
In case the retirement age has an odd period of up to 6 months, the reduction is 1%; from more than 6 months, the percentage will not be reduced due to early retirement.
According to Clause 2, Article 62 of the 2014 Law on Social Insurance; the employee has the entire time to pay social insurance premiums according to the salary regime decided by the employer; then calculate the average monthly salary on which social insurance premiums are based for the entire period.
Under Article 57 of the 2014 Law on Social Insurance; The Government will regulate the adjustment of pensions based on the increase in the consumer price index and economic growth by the state budget and the social insurance fund. So; When there is inflation, the Government will adjust the pension (increase pension) to suit the actual situation of each period.
Example of how to calculate pension for employees when participating in compulsory social insurance
In 2021, Mr. Q is 60 years old and 03 months old and has 20 years of compulsory social insurance payment with the average salary as the basis for social insurance payment of 5,000,000 VND.
Thus, Mr. Q is entitled to a pension at the rate of 47%, namely VND 2,350,000/month. Besides, every year Mr. Q’s pension is increased by 2%. Specifically, in 2022, Mr. Q’s pension will increase from VND 2,350,000 to VND 2,397,000/month and the maximum pension benefit of Mr. Q will be VND 3,750,000/month.
Maybe you are interested:
What is the difference between voluntary social insurance and compulsory social insurance?
According to the Law on Social Insurance 2014; There are two forms of social insurance: compulsory social insurance and voluntary social insurance. These two forms of social insurance have certain differences in terms of subjects; the modes as well as the level of payment….
Frequently asked questions
Social insurance contributions of employees will be made through the employer. According to Article 86 of Law on Social Insurance 2014, users will pay for insurance by the following methods:
– Closed monthly.
– Pay by-product or amount: Pay monthly, every 3 months, every 6 months.
Employees can choose one of the methods in Clause 1, Article 9 of Decree 134/2015/ND-CP:
– Monthly payment;
– Pay once every 3 months;
– Or, pay once every 6 months;
– Pay once every 12 months;
– One-time payment for many years to come, but not more than once every 5 years;
– One-off payment for the missing years for social insurance participants who have met the age conditions for enjoying pensions as prescribed; but the missing period of social insurance payment must not exceed 10 years (120 months); to be paid for the full 20 years to enjoy pension.
Search online about social insurance at the web portal of Vietnam Social Insurance; Employees access the following link: https://baohiemxahoi.gov.vn/tracuu/Pages/tra-cuu-dong-bao-hiem.aspx
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