Ms. Nguyen Nhung Chau (Nghe An) said that she taught at a semi-public kindergarten from 1988. From September 1999 to 2002, she participated in voluntary social insurance (SI); from 2002 to now, she has continued to participate in compulsory SI. Currently, Ms. Chau wonders: If she retires early, how will her pension be calculated?
Answering this question, Vietnam Social Security said that determining the conditions and level of pension enjoyment depends on many factors, the most important of which is the time, type of social insurance participation, number of years of contribution and retirement age.
The time of participation in social insurance determines the pension calculation method.
According to current regulations, employees can participate in compulsory or voluntary social insurance. The participation time in each type is accumulated to consider the conditions for enjoying pensions.
In Ms. Chau's case, the voluntary social insurance contribution period from 1999 to 2002 and the compulsory social insurance contribution period from 2002 to now are both included when considering retirement benefits.
Conditions for enjoying pensions according to the 2024 Social Insurance Law
The Social Insurance Law of 2024 stipulates that employees participating in compulsory social insurance when resigning, having paid social insurance for 15 years or more, will be entitled to a pension if they fall into one of the following cases:
Being old enough to retire according to the provisions of the Labor Code;
Being old enough to retire at a lower age in cases of doing heavy, hazardous, dangerous jobs, or working in areas with particularly difficult socio-economic conditions, provided that they have enough time to pay social insurance according to the law.
Premature retirement due to reduced working capacity
The law also allows employees to retire early if their working capacity is reduced, provided:
Having at least 20 years of compulsory social insurance contributions or more;
Early retirement of a maximum of 5 years compared to the retirement age if labor capacity is reduced from 61% to less than 81%;
Early retirement for a maximum of 10 years if labor capacity is reduced by 81% or more.
In these cases, the pension level will be lower than for people who retire at the right age.
How to calculate monthly pension levels
According to the 2024 Law on Social Insurance, the monthly pension level is calculated based on the average salary level as a basis for social insurance contributions, specifically:
Female workers:
Fully paying 15 years of social insurance and enjoying 45% of the average salary level;
Each year, paying an additional 2% is added, up to 75%.
Male workers:
Full 20 years of social insurance are entitled to 45%;
Each year, paying an additional 2% is added, up to 75%.
In case of paying for 15 to less than 20 years, the initial benefit level is 40%, then each additional year of payment is added by 1%.
How much will early retirement be reduced?
For people retiring before the prescribed age, after determining the benefit rate according to the number of years of social insurance contribution, each year of early retirement will be reduced by 2% of the pension level.
This means that if retired a few years early, the monthly pension can be significantly reduced and this reduction level applies throughout the pension benefit period.
Not enough information to calculate the specific number
According to Vietnam Social Security, because Ms. Nhung Chau has not provided complete information such as: year of birth, expected retirement age, health condition, salary level as a basis for social insurance contributions..., it is not possible to accurately calculate the pension she will receive if she retires early.
Vietnam Social Security recommends that Ms. Chau compare the above regulations with her case or contact the nearest social insurance agency, provide complete information to be consulted, answered specifically and ensure benefits upon retirement.
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