Opportunity to receive high pension thanks to additional pension

(Dan Tri) - From July 1, 2025, workers will have the opportunity to enjoy higher pensions thanks to the supplementary pension insurance regime.

High pension opportunity

Before January 1, 2007 (when the Social Insurance Law 2006 came into effect), the social insurance regime did not stipulate a salary as the basis for maximum social insurance contributions. During that time, many employees working in foreign-invested enterprises paid social insurance with salaries many times higher than the average. This led to a huge difference in pensions between groups of workers.

According to statistics from the Ho Chi Minh City Social Insurance in June 2024, the person with the highest pension in the city is 140 million VND/month. Meanwhile, the person with the lowest pension has not yet reached 2 million VND/month. That is, the highest pension is 70 times higher than the lowest pension.

Workers have a higher chance of receiving a pension if they choose to participate in supplementary pension insurance (Illustration: Ho Chi Minh City Social Insurance).

However, the 2006 Social Insurance Law has set a regulation that the salary used as the basis for compulsory social insurance contributions is at most 20 times the basic salary at the time of contribution. Since then, the pension gap between labor groups has been reduced.

At the same time, the regulation on maximum social insurance contribution also limits those with pensions of hundreds of millions of VND/month, which is too high compared to the general level.

This provision continues to be maintained in the 2014 Social Insurance Law. The 2024 Social Insurance Law (effective from July 1, 2025) also maintains the above provision according to Point d, Clause 1, Article 31, only replacing the basic salary with a reference level (to be specifically regulated by the Government).

To meet the needs of a segment of high-income workers who want to have an outstandingly high pension, the 2024 Social Insurance Law adds 1 chapter with 4 articles regulating the form of supplementary pension insurance.

According to Dr. Pham Truong Giang, Director of the Social Insurance Department of the Ministry of Labor, War Invalids and Social Affairs, one of the 14 major contents of the Social Insurance Law 2024 is to supplement regulations on subjects, principles, funds, and State policies on supplementary pension insurance.

The Legal Department of Vietnam Social Insurance assessed that the supplementary pension insurance regime creates conditions for employers and employees to have more choices and contribute to receive higher pensions.

Supplementary pension insurance fund

Article 124 of the 2024 Social Insurance Law stipulates: "Subjects participating in supplementary pension insurance are employers and employees".

Supplementary pension insurance will operate according to four main principles stipulated in Article 125 of the Social Insurance Law 2024.

Firstly, the level of additional pension insurance contributions is voluntarily agreed upon by the employer and employee.

Second, contributions to the supplementary pension insurance fund are managed for each individual pension account.

Third, the management of the supplementary pension insurance fund must be carried out according to the principles of publicity and transparency and must ensure investment in accordance with the provisions of law.

Finally, the level of supplementary pension insurance payment is determined on the basis of the balance of the individual pension account at the time of payment, accumulated through the investment of the supplementary pension insurance fund according to market principles.

The concept of Supplementary Pension Insurance Fund is also clarified in the 2024 Social Insurance Law in Article 126.

Accordingly, the Supplementary Pension Insurance Fund is a financial fund independent of the state budget; it is accounted for, accounted for, prepares financial reports, and audits in accordance with the provisions of the law on accounting and the law on auditing.

The sources of the supplementary pension insurance fund include contributions from employers, employees and profits from the fund's investment activities.

The supplementary pension fund is used to pay supplementary pension benefits to employees, organizational costs and management activities.

The State's policy on supplementary pension insurance is specifically stipulated in Article 127 of the Social Insurance Law 2024 (Article 127).

Accordingly, the State encourages the development of supplementary pension insurance through preferential policies in accordance with tax laws.

At the same time, the State will perfect the law and policies on supplementary pension insurance, organize the implementation of professional, modern and transparent policies; create conditions for employers and employees to participate.

Source: https://dantri.com.vn/an-sinh/co-hoi-huong-luong-huu-cao-nho-huu-tri-bo-sung-20241218173600105.htm