From July 1, 2025: Reduced contribution years, how will pension levels change?

According to the current regulations of the Law on Social Insurance 2014, the minimum pension rate is 45% with the condition that the social insurance payment period is 20 years for men and 15 years for women. However, from July 1, 2025, when the Law on Social Insurance 2024 takes effect, the social insurance payment period will be reduced to 15 years to receive pension for both men and women.

Pension regulations change from July 1, 2025. Illustration photo

Thus, when the social insurance payment period is reduced, the calculation of the employee's pension level will also be adjusted and changed, specifically:

For female employees, the monthly pension is calculated at 45% of the average salary used as the basis for social insurance contributions corresponding to 15 years of social insurance contributions. After that, for each additional year of social insurance contributions, the benefit rate will be calculated by 2%, up to a maximum of 75% corresponding to 30 years of social insurance contributions.

For male workers, the monthly pension is calculated at 45% of the average salary used as the basis for social insurance contributions, corresponding to 20 years of social insurance contributions. After that, for each additional year of social insurance contributions, the benefit rate will be calculated by 2%, up to a maximum of 75%, corresponding to 35 years of social insurance contributions.

Compared to the 2014 Social Insurance Law, the regulation for male employees with a social insurance payment period of 15 years to less than 20 years: The monthly pension will be calculated at 40% of the average salary used as the basis for social insurance payment corresponding to 15 years of social insurance payment. Then, for each additional year of payment, an additional 1% will be calculated.

Thus, the provisions of the 2024 Social Insurance Law on adjusting the calculation of pension benefits have important changes, creating conditions for many male workers with a shorter social insurance payment period to still have the opportunity to receive pensions.

In addition, the reduction of the minimum social insurance payment period to 15 years brings great opportunities for those who participate in social insurance late or have not participated continuously. Accordingly, instead of having to receive social insurance in one lump sum due to not meeting the payment period requirement to receive monthly pension, workers now have the opportunity to accumulate enough 15 years of payment to be able to receive pension and ensure their life when they retire.

Bao Thoa

Source: https://congthuong.vn/tu-172025-giam-nam-dong-muc-luong-huu-thay-doi-ra-sao-380100.html