Reduce minimum social insurance payment period, add more beneficiaries of pension

In Resolution No. 114/NQ-CP dated July 28, 2023 of the Government meeting in July 2023 on the draft Law on Social Insurance (amended), the Government agreed to reduce the minimum social insurance payment period to receive pension from 20 years to 15 years.

The Ministry of Labor, Invalids and Social Affairs proposes that employees who reach retirement age and have paid social insurance for 15 years or more will be entitled to a pension.

Workers who have paid social insurance for 15 years may have a more modest pension than those who have paid for a longer period, but they still receive a monthly pension, which is periodically adjusted by the State, and enjoy health insurance.

In the Government's submission to the Draft Law on Social Insurance (amended), the Ministry of Labor, Invalids and Social Affairs proposed amending the regulation that employees who reach retirement age and have paid social insurance for 15 years or more will receive a monthly pension.

This regulation aims to create opportunities for those who participate in social insurance late (starting at 45-47 years old) or those who do not participate continuously, leading to the fact that when they reach retirement age, they still do not accumulate enough 20 years of social insurance contributions to receive monthly pensions instead of having to receive social insurance in one lump sum.

The Ministry of Labor, Invalids and Social Affairs said that the regulation reducing the minimum number of years of social insurance contributions to receive monthly pension from 20 years to 15 years only applies to cases of retirement under Article 71 and not to cases of retirement under Article 72 (cases of early retirement before the prescribed age). For cases of early retirement before the prescribed age, each year of early retirement will reduce the pension rate by 2%.

The monthly pension of employees who meet the conditions specified in Article 71 is calculated at 45% of the average monthly salary for social insurance payment; corresponding to a social insurance payment period of 20 years for male employees, corresponding to a social insurance payment period of 15 years for female employees, then for each additional year of payment, an additional 2% is calculated, with a maximum of 75%.

In case a male employee meets the conditions specified in Article 71 of this Law and has paid social insurance for 15 years but less than 20 years, each year of paying social insurance corresponds to a pension rate of 2.25%.

In case an employee is eligible for a pension but the social insurance payment period used to calculate the pension is less than 15 years, each year of social insurance payment corresponds to a pension rate of 2.25%.

The Ministry of Labor, Invalids and Social Affairs believes that, with the above regulation, the pension level of those who have paid social insurance for 15 years or more may be lower than those who have paid for a long time if the salary used as the basis for paying compulsory social insurance or the income used as the basis for paying voluntary social insurance is the same.

However, these cases were previously not eligible for pension, they received social insurance in one lump sum (if they did not choose to voluntarily pay in one lump sum for the missing period), now will have the opportunity to receive monthly pension.

Thus, although the pension level may be more modest than those with a long contribution period, with a stable monthly pension, periodically adjusted by the State and during the pension period, the social insurance fund will pay for health insurance, which will contribute to better ensuring the life of workers in their old age.

STRONG

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