According to regulations, the social insurance benefit level is calculated based on the contribution level, the period of social insurance contribution and is shared among social insurance participants. Therefore, during the process of participating in social insurance, in many cases, employees have high salaries as the basis for social insurance contribution and a long number of years of social insurance contribution, so when they retire, they have a fairly high pension level.
Nationwide, there are 471 cases receiving pensions of 20 million VND or more.
High pension due to high social insurance contributions
According to Vietnam Social Security, Mr. PPNT (residing in Ho Chi Minh City) is the person with the highest pension in the country with more than 124 million VND/month. Before retiring, Mr. T. was Chairman of the Board of Directors and General Director of a company.
In April 2015, Mr. T. retired with a pension of more than 87.3 million VND/month. After 5 adjustments to the State's pension, by June 2023, Mr. T.'s pension was 124,714,600 VND/month.
To get the current pension, Mr. T. has paid social insurance for over 23 years, in which, before 2007, when the salary was the basis for paying social insurance was based on the actual salary (the amount of social insurance was not limited by the ceiling), Mr. T.'s social insurance contribution was very high. There were times when Mr. T.'s average social insurance salary was over 200 million VND/month.
When the 2006 Social Insurance Law came into effect, it stipulated that the maximum monthly salary for compulsory social insurance contributions was equal to 20 months of the general minimum wage (or basic salary). Accordingly, from January 2007 to March 2015, Mr. T. always paid social insurance at the highest rate as prescribed, with an average social insurance contribution salary of 15.4 million VND/month - 23 million VND/month.
According to statistics from Vietnam Social Security, as of April 2023, there were 471 cases nationwide with a salary of 20 million VND or more. Of which, the salary from 20 million VND to less than 30 million VND was 382 cases; from 30 million VND to less than 50 million VND was 80 cases; from 50 million VND or more was 9 cases.
These cases all work in private companies, joint ventures, and foreign enterprises in Vietnam, with a period of social insurance payment based on the actual salary in foreign currency or Vietnamese Dong at a high level (before 2007) or at a maximum level of 20 times the general minimum wage/basic salary at the time of payment (from 2007 onwards).
Adjusted increase from 1/7
According to statistics in 2022, the average salary for social insurance contributions in the whole system is 5.73 million VND, equal to 76% of the average income of salaried workers. FDI enterprises have the highest and lowest salary for social insurance contributions in the private sector.
However, there are cases where businesses separate or transfer allowances to other benefits to avoid paying social insurance. Therefore, the salary for social insurance is currently only slightly higher than the minimum wage, plus 5-7% allowance for heavy, hazardous work or vocational training.
This contribution level makes the pension very low. For example, a company pays an employee 20 million VND but pays social insurance based on a salary of 5 million VND. If the employee pays for the full year and retires at the right age, he or she will only receive a minimum of 45% and a maximum of 75% of the average of the entire contribution period.
To overcome the above situation, the draft Law on Social Insurance (amended) proposes two salary options as the basis for calculating monthly social insurance contributions, applicable to employees in the enterprise sector paying regional minimum wages.
Option 1 maintains the current regulations. The salary used as the basis for social insurance contributions includes salary, salary allowances and other additional amounts determined by specific amounts stated in the labor contract. This causes harm to workers because during the working process, the above amounts all change.
Option two is that the monthly salary includes the salary, salary allowances and additional amounts as prescribed by the Labor Code. In this way, the amount calculated for social insurance contributions includes both predetermined amounts and fluctuations during the employee's working process. Thus, the employee's social insurance contribution salary will be increased to receive a higher pension.
The Ministry of Labor, War Invalids and Social Affairs has issued a draft circular guiding the adjustment of pensions, social insurance benefits and monthly allowances. Accordingly, from July 1, 2023, pensions, social insurance benefits and monthly allowances will be adjusted to increase.
Pension rates (from 2022) are as follows:
For retired male workers, every 20 years of social insurance contributions is calculated at 45% of the average monthly salary for social insurance contributions.
For retired female workers, every 15 years of social insurance contributions is calculated at 45% of the average monthly salary for social insurance contributions.
After that, for each additional year of social insurance payment, the employee will be calculated an additional 2%; the maximum level is equal to 75% of the average monthly salary for social insurance payment.
(Source: Government Electronic Newspaper)
Useful
Emotion
Creative
Unique
Source
![[Photo] Prime Minister Pham Minh Chinh chairs conference on anti-smuggling, trade fraud, and counterfeit goods](https://vphoto.vietnam.vn/thumb/1200x675/vietnam/resource/IMAGE/2025/5/14/6cd67667e99e4248b7d4f587fd21e37c)
Comment (0)