Director Phan Van Men stated that the retirement age of both males and females will be extended gradually, not abruptly. In details, from 2021, any employees can retire after participating in social insurance for 20 years, and the retirement age is 60 years 3 months for men and 55 years 4 months for women. Then, three months will be added each year until 2028, when the officially retirement ages are 62 and 60 for males and females, respectively.
The Director said that this increase will affect workers nationwide, including HCMC, where about 12,000 laborers would enter retirement if the Decree were not effective next year. Now they have to work 3-4 months more.
When asked about the pension if an employee completes his or her 20-year social insurance duty, Director Men shared that in the normal working condition, a female can receive 55 percent of the average monthly salary used to pay social insurance, while a male can receive 47 percent in 2021 and 45 percent from 2022 onwards.
Director Phan Van Men added that the maximum pension rate in Vietnam is 75 percent, which is higher than the global counterpart of 50 percent.
At present, the monthly pension rate is set at 45 percent of the monthly salary paid for social insurance on average (when participating in social insurance for 15 years for women and 19 years (in 2021) or 20 years (from 2022) for men). After this, 2 percent more will be added to this rate for every additional year of contributing to social insurance.
Therefore, a female worker needs to join in social insurance for 30 years, whereas a male one needs 34 years (in 2021) or 35 years (from 2022), said the Director.
Discussing the cases to enjoy early retirement, Director Men revealed that laborers from 50 years old and with 20 years taking part in social insurance can ask for early retirement if they have already worked for 15 years in a coal mine.
Another case is employees suffering from HIV/AIDS and with 20 years taking part in social insurance, regardless of their age.
A worker with 20 years participating in social insurance can retire 5 years earlier if his or her working capacity reduces by 61 percent to under 81 percent, or 10 years if this proportion reaches 81 percent and over.
People who join in social insurance for a full 20 years and do heavy, hazardous or dangerous work for 15 years can immediate retire regardless of their age if their working capacity decreases by 61 percent.
Advising laborers on the choice to claim a lump sum or monthly pension, the Director said that it is wiser to select the second choice.
He further explained that the Vietnamese social insurance policy identifies 5 regimes of retirement, sickness, maternity, occupational accident or disease, and survivorship. Among them, the retirement regime is the most significant as it is a long-term support to help senior citizens become more active as well as ensuring wide-scaled social security.
Hence, the Director affirmed receiving a lump sum means a disadvantage to the retired, since a monthly pension goes along with a life-long health insurance, a fee to take care of the funeral, and a survivorship allowance if the retired dies when there is a child under 18 of age or old handicapped parents.
In the time of COVID-19 pandemic, in case laborers cannot keep their job, they can enter voluntary social insurance or reserve the social insurance paying time until they are able to continue mandatory social insurance participation.
The Director concluded the interview with the information that if laborers join in social insurance longer than the time to receive the maximum pension rate of 75 percent (30 years for females and 34 years for males in 2021), besides their formal pension, they can receive a lump-sum support, calculated as half of the monthly salary used to pay social insurance for each extra year.
At present in HCMC, around 2.4 employees are taking part in social insurance and over 236,000 retired people.