Extra social insurance contribution required for maximum pension
The Saigon Times Daily
HCMC - From 2018 onwards, workers will have to contribute social insurance for five more years, meaning 35 years for men and 30 years for women, if they want to enjoy the highest pension rate of 75%, according to a Vnexpress report.
The 2014 Law on Social Insurance stipulates a gradual increase in the period of social insurance contribution to be eligible for the maximum pension.
From January 1, 2018, retired female workers who have contributed social insurance for 15 years will get a pension equaling to 45% of their average monthly salary. Starting from the 16th year, the pension grows by 2%.
Those female workers who have made social insurance contributions for 30 years will enjoy the maximum pension rate of 75%. The current duration is 25 years.
Meanwhile, male workers who have had 15 years contributing social insurance currently get a pension representing 45% of their average monthly wage. From 2018 onwards, to enjoy such a pension rate, the duration of their social insurance contribution should be 16 years.
Starting from 2022, they will have to contribute social insurance for 20 years if they want a 45% pension. To qualify for a pension of 75%, male workers will have to contribute social insurance for 35 years, instead of the current 30 years.
Male workers who retire in 2018 and have contributed social insurance for 31 years can receive a 75% pension. If they retire from 2019, 2020, 2021 and 2022 onwards, the duration of social insurance contribution must be 32-35 years to enjoy the highest pension.
Bui Sy Loi, deputy chairman of the National Assembly’s Committee for Social Affairs, said the new calculation method will reduce pensions for workers, especially those in the private sector.
He noted not everyone who retires before 2018 would be better off than pensioners from 2018 onwards because pension depends on many factors such as entitlement, average salary, the start date of pension payment and the length of the pension plan.
From January 1, 2016 to 2017, social insurance contribution is based on wage plus allowances stated in the labor contract. From January 1, 2018 onwards, social insurance contribution will depend on salary, allowances and other benefits stated in the labor contract.