From 2026, the method of calculating the monthly pension benefit level of employees will be implemented according to the provisions of Article 66 of the 2024 Law on Social Insurance (SI), with some new calculation principles, notably the shortening of the minimum time of social insurance (SI) participation to be eligible for pension benefits.
Only need 15 years of social insurance contribution to receive pension
According to regulations, in 2026, employees who have participated in social insurance for 15 years and are old enough to retire according to regulations will receive a monthly pension. This is an important change compared to before, when the minimum condition was 20 years of social insurance contribution.
However, the monthly pension level will be calculated differently between male and female workers, based on the time of social insurance contribution and the average salary level as a basis for social insurance contributions.
How to calculate pensions for female workers
For female workers, the monthly pension level is calculated as follows:
The benefit level is equal to 45% of the average salary level used as the basis for social insurance contributions corresponding to 15 years of social insurance contributions;
After that, for each additional year of social insurance contribution, an additional 2% is added;
The maximum benefit level does not exceed 75% of the average salary level as a basis for social insurance contributions.
Thus, female workers reach a maximum benefit level of 75% when they have a total social insurance contribution period of 30 years.
How to calculate pensions for male workers
For male workers, the calculation method is divided into two cases.
Cases with 20 years or more of social insurance contributions:
The monthly pension level is equal to 45% of the average salary level used as the basis for social insurance contributions corresponding to 20 years of social insurance contributions;
After that, each additional year of contribution is added by 2%;
The maximum benefit level is 75%.
Cases of male workers with social insurance contribution periods from 15 years to less than 20 years:
The monthly pension level is equal to 40% of the average salary level as a basis for social insurance contributions corresponding to 15 years of social insurance contributions;
After that, each additional year of payment is added by 1%.
This regulation aims to ensure retirement benefits for male workers who have participated in social insurance for less than 20 years but have reached retirement age.
Early retirement is deducted from pension benefits
The 2024 Law on Social Insurance reserves Article 65 to regulate cases of retirement earlier than retirement age due to reduced working capacity.
Accordingly, at the time of meeting the conditions for early retirement, employees are still fully entitled to retirement benefits. However, due to early retirement compared to people who retire at the right age, the monthly pension benefit level will be reduced.
Deduction level for early retirement
According to Clause 3, Article 66 of the Law on Social Insurance, the monthly pension level of early retirees is calculated according to the general formula, then deductions are applied as follows:
For each year of early retirement before the prescribed age, reduce 2% of the pension benefit level;
In case the early retirement period is less than 6 months, the benefit rate shall not be reduced;
From 6 months to less than 12 months, it decreases by 1%.
This regulation aims to ensure fairness between people who retire at the right age and people who retire early, and at the same time encourage workers to extend their working hours and contribute to social insurance to increase their pension benefits in old age.
