Early retirement must pay social insurance for 20 years

Normally, when retiring before retirement age, a percentage will be deducted. However, the recently revised Draft Law on Social Insurance (SI) has added a condition that workers who want to retire before retirement age must have paid social insurance for 20 years.

Nghỉ hưu trước tuổi, đóng bảo hiểm xã hội , Luật Bảo hiểm xã hội

Illustration photo.

The minimum number of years of social insurance contributions required to receive a monthly pension will be reduced from 20 years to 15 years. However, this provision does not apply to early retirement. This is one of the contents proposed by the Government to be amended as stated in the National Assembly's submission to the draft revised Law on Social Insurance.

Mr. Nguyen Duy Cuong - Social Insurance Department (Ministry of Labor, War Invalids and Social Affairs) said that this proposal aims to create opportunities for those who participate in social insurance late, or have not participated continuously, or have a short period of social insurance payment, to receive pensions.

Specifically, in Article 71, the draft revised Social Insurance Law stipulates that employees who reach retirement age and have paid social insurance for 15 years or more are entitled to receive a monthly pension (instead of 20 years as currently prescribed).

This regulation aims to create opportunities for late participants (starting participation at 45 - 47 years old) or those who participate intermittently, leading to not having accumulated enough 20 years of social insurance contributions when reaching retirement age, to receive monthly pensions, instead of having to receive social insurance in one lump sum.

This reduction in the number of years of contribution benefits female workers more when calculating their pension, because the pension rate after 15 years of contribution is 45%, while for men it is 33.75%.

With the above regulations, the pensions of these people may be lower than those with a long payment period. However, these cases were previously not eligible for pensions. If they did not choose to voluntarily pay a lump sum for the remaining time, they would choose to receive a lump sum social insurance payment. Now they will have the opportunity to receive monthly pensions.

The Government assessed: "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, health insurance will be paid, it will contribute to better ensuring the life of workers in their old age."

However, the Government also clarified 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 does not apply to cases of early retirement before the prescribed age.

For cases of early retirement, each year of early retirement will reduce the pension rate by 2%. If the above regulation is applied to these cases, it will lead to a situation where the pension rate is too low (short contribution period, deduction of the rate due to early retirement), the pension level is too low, not very meaningful.

For example, if a male worker has 15 years of social insurance contributions, the pension rate is 33.75%. If he retires 5 years earlier, 10% will be deducted, so the pension rate will only be 23.75%.

According to experts, shortening the social insurance payment period to 15 years to receive pension will strengthen the social security system in the future. In particular, current data from Vietnam Social Security shows that in the 6 years of implementing the Social Insurance Law, there are 476,000 people receiving one-time social insurance who have participated in social insurance for over 10 years and are aged 40 and above. In addition, there are over 53,000 people who have passed the retirement age and must receive one-time social insurance because they have not paid enough 20 years of compulsory social insurance, and over 20,000 people who have reached retirement age and have not paid enough time must pay one-time for the remaining time to receive salary. The Ministry of Labor, Invalids and Social Affairs commented: "If the minimum time to receive pension is still stipulated as 20 years, these people will have little chance of receiving pension".

Assessing the impact of the policy of reducing the number of years of social insurance contributions from 20 years to 15 years to receive pension, the Ministry of Labor, Invalids and Social Affairs said that it could help increase the number of people receiving pensions when they reach retirement age, reducing the burden on the State in ensuring social security for the elderly.

According to Great Solidarity

Early retirement, social insurance payment, Social Insurance Law

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