Conditions for receiving retirement benefits – How to calculate social insurance pension

What are the conditions for receiving retirement benefits (pension benefits)? What is the pension rate? Formula, how to calculate social insurance pension, procedures for applying for retirement benefits.

I. Conditions for receiving pension (retirement regime)

1. Conditions for enjoying retirement benefits generally applicable to employees

Retirement benefits are applied to groups of people with the following work history:

1. Employees working under indefinite-term labor contracts, fixed-term labor contracts, seasonal labor contracts or working for a certain job with a working period from 3 months to less than 12 months (including labor contracts signed between the employer and the legal representative of employees under 15 years old);
2. Employees working under a labor contract with a term from 1 month to less than 3 months;
3. Officials, civil servants;
4. Defense workers, police, people working in key organizations;
5. Officers – soldiers, professional officers – non-commissioned officers, officers – non-commissioned officers with technical expertise of the people’s police, and people working in cryptography receive salaries as soldiers;
6. Non-commissioned officers – soldiers of the people’s army, non-commissioned officers – soldiers of the people’s police, military and police students…;
7. Workers working abroad have signed labor contracts;
8. Business managers and cooperative managers receive salaries;
9. Part-time workers in communes, wards, towns…

Employees in the above cases, if they have paid social insurance for 20 years, will receive a pension if they fall into one of the following cases:

➨ Case 1: Applicable to subjects (1), (2), (3), (4), (7), (8) and (9)

If employees meet the requirements for social insurance participation time, they will receive pension when they reach retirement age. In 2024, male employees will retire at 61 years old and female employees at 56 years and 4 months.

According to Clause 2, Article 4 of Decree 135/2020/ND-CP of the Government, the retirement age of employees working under normal conditions each year from 2024 will be determined as follows:

➨ Case 2: Applicable to subjects (5) and (6)

The retirement age of military officers in 2024 is prescribed as follows:

In addition, the retirement age of military officers in 2024 can be extended when the military has a need or the officer has sufficient political and moral qualities, is good at expertise and profession, is in good health and volunteers. The retirement age can be extended but not more than 5 years (except in special cases).

➨ Special cases: Employees in one of the following cases can retire at a lower age than the prescribed age, but not more than 5 years older than employees working under normal conditions:

• Employees who have 15 years or more of experience doing heavy, toxic, dangerous or especially toxic, heavy, dangerous work on the list issued by the Ministry of Labor, War Invalids and Social Affairs;
• Employees who have worked for 15 years or more in areas with special socio-economic difficulties, including working time in areas with regional allowance coefficient of 0.7 or more before January 1, 2021;
• Workers with reduced working capacity > 61%;
• Workers in heavy, toxic, dangerous or especially toxic, heavy, dangerous jobs on the list issued by the Ministry of Labor – Invalids and Social Affairs and workers working in areas of special socio-economic difficulties, including working time in places with regional allowance coefficient of 0.7 or higher before January 1, 2021 for 15 years or more.

The retirement age of employees in this case is determined as follows:

2. Conditions for receiving early retirement pension

Employees who have participated in compulsory social insurance for 20 years or more and whose working capacity is reduced by 61% or more are allowed to retire 5 years earlier than the prescribed retirement age.

If you want to retire early, you must participate in compulsory social insurance for at least 20 years.

II. Pension rate and monthly social insurance pension calculation

The monthly pension is calculated at 45% of the average monthly salary subject to social insurance contributions according to regulations and corresponding to the number of years of social insurance contributions, specifically as follows:

• Men retire in 2018 for 16 years, in 2019 for 17 years, in 2020 for 18 years, in 2021 for 19 years, from 2022 onwards for 20 years;
• Female retirement from 2018 onwards is 15 years.

After that, for each additional year, the employee is calculated an additional 2%, up to a maximum of 75%.

The monthly pension received by employees is calculated as above, then for each year of retirement before the prescribed age, it is reduced by 2%.

In case the employee’s retirement age is 6 months odd, the reduction is 1%, if it is more than 6 months, the percentage will not be reduced due to the employee retiring before the age.

In addition, if the employee has participated in social insurance for more years than the maximum pension rate of 75%, he/she will receive an additional one-time subsidy upon retirement. The subsidy level will be calculated by multiplying 0.5 months of average salary by the number of years higher than the pension rate of 75%.

>> You may be interested in: Conditions for receiving one-time social insurance benefits.

III. Time to receive social insurance pension

The time when employees are entitled to social insurance pension is regulated into 3 cases (corresponding to each specific subject) as follows:

• For employees in cases (1), (2), (3), (4), (5), (6) and (9) above: The time to receive pension is the time stated in the decision to quit work made when the employee has met the conditions to receive pension according to the provisions of law;
• For employees specified in case (7) above and those who are reserving their social insurance payment period: The time to receive pension is the time stated in the written request of the employee who has met the conditions to receive pension according to regulations;
• For employees in case (8) above: The time to receive pension is calculated from the month following the month when the employee is eligible for pension and has a written request sent to the social insurance agency.

IV. Documents and procedures for retirement benefits

1. Social insurance retirement benefit application

2. Where to submit retirement documents?

Depending on the subject, the place to receive retirement benefits is as follows:

• For employees working at agencies/units: Employers submit documents to the district-level Social Insurance agency where they are participating in social insurance;
• For employees participating in voluntary social insurance or reserving social insurance payment period, submit to the district-level social insurance agency or the social insurance agency where they reside.

3. Methods and procedures for applying for social insurance retirement benefits

There are 2 ways to apply for retirement benefits for employees, specifically:

➨ Method 1: Submit application directly to the Social Security agency within 30 days from the date of receiving pension.

➨ Method 2: Submit documents via electronic transaction. Employees register to receive an authentication code and then send electronic documents to the Vietnam Social Security Electronic Information Portal. In case the paper documents cannot be converted to electronic format, the paper documents must be sent to the Social Security agency by post.

Within a maximum of 12 working days from the date of receiving complete retirement benefit documents, the Social Insurance agency will return the results to the person performing the procedure.

IV. Frequently asked questions about social insurance retirement regime

1. A female employee has paid social insurance for 20 years. If this employee was born on March 5, 1960, what month is the retirement date stated in the decision? If she was born on March 15, 1960, what month is the retirement date stated in the decision?

The time for receiving pension for employees is the 1st day of the month following the month of birth of the year in which the employee meets the age requirement for receiving pension (55 years old for female employees). In case the female employee has paid social insurance for 20 years and was born in March 1960, the time for receiving pension will be April 1, 2015.

➨ So, whether this female worker was born on March 5, 1960 or March 15, 1960, the time recorded in the retirement decision is the same (April 1, 2015).

2. Male employee born on January 26, 1966, working at ABC company, paying social insurance for 25 years. In February 2016, the Medical Examination Council determined that he had lost 64% of his working capacity. In the above case, when will he be entitled to receive pension based on reduced working capacity?

The employee was born in January 1966 and has participated in social insurance for 25 years. According to Point a, Clause 1, Article 55 of the Law on Social Insurance 2014, the employee will retire in February 2021 when he/she turns 55 years old.