Ensuring the life of employees participating in Social Insurance when they retire

This benefit rate is quite high but in many casesworkerDue to low social insurance contributions, short contribution period, early retirement... the pension will be low upon retirement.

Low Social Insurance benefits due to low contribution rate and short contribution period

Currently, in addition to those with high pensions, our country also has many people with low pensions. These cases are mainly those who retire from the Nghe An Farmers' Social Insurance Fund and transfer to Voluntary Social Insurance according to Decision 41/2009/QD-TTg dated March 16, 2009 of the Prime Minister. Non-professional commune officials are also in the group of low pensioners, this group has a Social Insurance contribution rate of only 8% of the basic salary. Voluntary Social Insurance participants mostly choose the monthly income as the basis for voluntary Social Insurance contribution (selected by the participant) equal to the poverty line of rural areas (before 2022, the poverty line of rural areas is 700,000 VND, from 2022 it is 1.5 million VND).

In fact, the vast majority of voluntary social insurance participants only pay social insurance until they have completed 20 years of service to meet the minimum time requirement to receive a pension. Due to the low social insurance contribution rate and short social insurance contribution period, the average benefit level of this group is low.

In addition, many employees who pay compulsory social insurance due to lack of social insurance payment time to receive pension have chosen to pay monthly or one-time voluntary social insurance payment for the missing time at a low level, so their pension will also be low.

For those participating in compulsory social insurance, many businesses “circumvent the law” by paying social insurance for employees that is not in line with the actual salary and income of the employees. In some units, the income used as the basis for paying social insurance for employees is always at the lowest level, leading to the average benefit of employees being low when they retire.

The above situation shows that although the percentage of pensioners is quite high (maximum 75%), due to low contribution levels; short period of social insurance contribution to receive pensions, the situation of many workers (especially workers working outside the state sector) retiring early, not paying the correct salary and actual income at some employers... leads to the current average benefit level of many workers being low.

To give workers better and better pensions

Currently, the Law on Social Insurance stipulates that salary is the basis for paying social insurance for employees (including salary and allowances). For some employee benefits (support) of the employer that are regular and stable, such as: support for gasoline, phone, lunch, housing, etc., current law stipulates that they are not used as the basis for calculating social insurance contributions. Taking advantage of this regulation, some enterprises "circumvent the law" by dividing allowances into these support amounts to avoid paying or not paying enough social insurance. Therefore, in order to ensure the legitimate rights of employees, Vietnam Social Security proposes that competent authorities study the plan when amending the salary used as the basis for paying social insurance in the direction that employees pay social insurance according to the salary regime decided by the employer, the salary used as the basis for paying social insurance is the monthly salary, including: salary, salary allowances, and other supplements paid regularly in each salary payment period.

In addition, it is necessary to study to harmonize the 3 types of income of employees and have a legal basis to clearly determine the income of employees as the basis for paying social insurance, avoiding the situation of too large a difference between the income of employees for tax settlement and the actual income paid to employees, creating conditions to ensure the best benefits for employees when they retire. However, this content requires opinions from related sectors such as Finance, Labor, Justice, Vietnam General Confederation of Labor, etc.

In the current situation, some employers pay social insurance at a level that is not in accordance with the actual income of employees according to the salary received, to ensure full benefits for themselves, when signing a labor contract, employees need to pay attention to the agreement on the salary received, the salary paid for social insurance in the contract and make recommendations to the unit if the salary paid for social insurance is lower than the salary received or lower than the regulations on the regional minimum wage.

At the same time, employees need to regularly monitor and look up their social insurance payment and benefit process through channels (such as the Vietnam Social Insurance Electronic Information Portal, VssID application - Digital Social Insurance...) to promptly grasp information on social insurance payment of the employer; promptly report to the competent authorities any acts of incomplete social insurance payment by the employer for the employee (if any).

Currently, there are more than 3.3 million people nationwide receiving monthly pensions and social insurance benefits. To continue improving the lives of retirees, on June 29, 2023, the Government issued Decree No. 42/2023/ND-CP adjusting pensions, social insurance benefits and monthly benefits.

Accordingly, pensions, social insurance benefits and monthly allowances will be increased from 12.5% ​​to 20.8% for beneficiaries. Those who retired before 1995 and still receive less than 3 million VND/month after adjustment will receive an increase, specifically: those receiving less than 2.7 million VND/month will receive an increase of 300,000 VND/month; those receiving from 2.7 million VND to less than 3 million VND/month will receive an increase of 3 million VND/month. This Decree takes effect from August 14, 2023; the provisions of the Decree will be implemented from July 1, 2023.