15% pension increase helps retirees feel less miserable when staying in the city

Living in the city

Mr. Nui is 65 years old this year. After retiring, he continued to work as an office worker and driver for a company in District 3, with a salary of 6 million VND/month.

Mr. Nui will retire in 2022 when he reaches the age of retirement, with 32 years of social insurance contributions, eligible for pension benefits according to regulations. However, after enjoying his retirement for a short time, he felt suffocated because his pension was too low, not enough to cover his own expenses.

"With 32 years of social insurance contributions as an office worker and driver for a state agency... I now only receive a pension of less than 4 million VND/month. My salary is not enough to cover my personal expenses while in Ho Chi Minh City," said Mr. Nui.

luong-huu_Xuan-Truong — Retired officials in Ho Chi Minh City receive monthly pensions (Photo: Pham Tho).

So Mr. Nui applied for a part-time job under a seasonal labor contract. Because he is old, he had to accept a job with a low salary compared to the general labor market. His pension plus his seasonal salary is nearly 10 million VND/month, which is enough for him to live in the city.

Like Mr. Nui, many workers, laborers, and civil servants in Ho Chi Minh City are worried that when they retire, their pensions will not be enough to cover their living expenses.

Ms. Pham Thuy H. (52 years old, a worker in Ho Chi Minh City) said that after many years of working and many salary adjustments, the company currently pays social insurance for her based on a salary of 5.4 million VND/month. Ms. H. is concerned that when she receives her pension, even though she reaches the maximum level of 75% of the average monthly salary used as the basis for paying insurance, the monthly pension amount she receives will still be small.

Ms. H. calculated that if she used her pension after retiring to open a grocery store or a small coffee shop to do business, it would be easier to make a living.

Increase pensions to ensure social security

With the information that pensions will be adjusted to increase from July 1 this year, Mr. Nui and his friends and acquaintances all expect their pensions to increase by at least 15%.

"The cost of living in Ho Chi Minh City is very expensive, while market prices are increasing, so the current pension is not enough to live on. I really hope that the pension will increase so that old people like us do not have to work hard to earn extra money," Mr. Nui said.

cong-nhan_Xuan-Truong — Workers already have a difficult time, when they retire with low salaries, the pressure is even greater (Photo: Xuan Truong).

Director of the Institute for Market Research and International Communications Ho Minh Son said that the proposal of the Ministry of Labor, War Invalids and Social Affairs that from July 1, the pension level should increase by at least 15% is very appropriate.

"The pension adjustment of at least 15% is very appropriate and timely in the context of increasingly escalating market prices. However, to reduce the pension gap between periods, it is necessary to determine a minimum pension floor," Mr. Son stated his opinion.

According to Mr. Son, timely pension adjustment is a way to prevent and reduce the situation of employees withdrawing social insurance at one time.

"The purpose of participating in social insurance is to ensure long-term social security, when each person reaches retirement age. Many workers withdrawing social insurance at one time is a burden on ensuring social security later. We always recommend that workers should not withdraw social insurance at one time to avoid losing many benefits," Mr. Son emphasized.

According to a recent proposal by the Ministry of Labor, War Invalids and Social Affairs, from July 1, pensions and social insurance benefits will increase by 15%; preferential allowances for people with revolutionary contributions will increase by 29.2%, equivalent to an increase from VND 2,055,000/month to VND 2,655,000/month; and social allowances will increase by 38.9%, equivalent to an increase from VND 360,000 to VND 500,000/month.

Source