How to calculate monthly pension levels
Based on Article 66 of the 2024 Law on Social Insurance, the monthly pension level of eligible employees is determined based on the social insurance contribution period and the average salary level as a basis for social insurance contributions.
For female workers, the pension level is equal to 45% of the average salary level when they have 15 years of social insurance contributions; then, each additional year of contribution is calculated at an additional 2%, the maximum level is 75%.
For male workers, the pension level is equal to 45% of the average salary level when they have 20 years of social insurance contributions; then, each additional year of contribution is added 2%, up to 75%.
In case male workers have a social insurance contribution period of 15 years to less than 20 years, the starting benefit level is 40% corresponding to 15 years of contribution, then each additional contribution year is calculated at an additional 1%.
Will early retirement result in a pension reduction?
According to Clause 3, Article 66 of the 2024 Law on Social Insurance, employees who are eligible for early retirement as prescribed in Article 65 of this Law are still entitled to calculate the pension level according to the general formula, but will have their enjoyment rate reduced due to early retirement.
Each year of early retirement will be reduced by 2% of the pension benefit rate.
In case of retirement before the age of less than 06 months, the percentage of pension benefits is not reduced.
In case of early retirement from 06 months to less than 12 months, the pension enjoyment rate will be reduced by 1%.
Thus, early retirement does not cause loss of pension benefits, but reduces the rate of enjoyment, except in cases where the early retirement period is very short as prescribed.
Some specific cases
The Law also stipulates a separate pension level for employees in certain occupations and special jobs in the people's armed forces, with funding guaranteed by the state budget.
In addition, for employees who have paid social insurance according to international treaties of which Vietnam is a member but whose contribution period in Vietnam is less than 15 years, each year of contribution will be calculated at 2.25% of the average salary level as a basis for social insurance contributions.
Pre-retirement will reduce the pension benefit rate, with a common reduction of 2% for each year of early retirement, except for cases of pre-retirement under 6 months or from 6 months to under 12 months as prescribed. Therefore, employees need to carefully calculate the retirement time to ensure long-term pension benefits.
