Some changes in pensions and retirement age from 1/1/2016

Voters in An Giang, Quang Nam, Vinh Phuc, Hai Duong, Lam Dong, Thai Nguyen provinces, Hanoi and Ho Chi Minh City requested to review and adjust the calculation of pensions, retirement ages, death benefits, contribution levels and methods of social insurance; and support voluntary social insurance participants.

Voters in An Giang province believe that according to the proposal on social insurance benefits, the pension will be reduced by 20%, which is unreasonable. They request the Ministry of Labor, War Invalids and Social Affairs to review and make appropriate adjustments.

Regarding retirement age, voters in Hanoi, Ho Chi Minh City, Lam Dong, Thai Nguyen, and Hai Duong provinces proposed to study and have more reasonable and fair regulations in the direction that men and women have the same retirement age of 60 years old or keep the regulation that men are 60 years old and women are 55 years old, and at the same time have a special regime, or clearly stipulate the retirement subjects for women and those working in art troupes.

Voters in An Giang, Hai Duong, Vinh Phuc, and Quang Nam provinces proposed that the minimum wage should be sufficient for employees to pay social insurance directly from their salaries, and that businesses should not pay on their behalf to avoid cases where businesses avoid paying social insurance for employees. At the same time, there should be measures to support those who voluntarily pay social insurance, and to resolve the death benefits for employees' relatives commensurate with the time the employee previously paid social insurance.

The Ministry of Labor, War Invalids and Social Affairs responded to voters in provinces and cities as follows:

The 2014 amended Law on Social Insurance took effect from January 1, 2016. Accordingly, the contents on how to calculate pension levels, retirement age, death benefits, social insurance contribution levels, social insurance contribution methods, and State support policies for voluntary social insurance participants have been considered and decided by the National Assembly.

About how to calculate pension

Stipulate a roadmap to gradually increase the social insurance payment period to achieve a maximum pension rate of 75%, towards the point where employees with 30 years of social insurance payment for women and 35 years for men will achieve a maximum pension rate of 75%.

Amending the regulation on reducing the pension rate due to early retirement from 1% to 2% for each year of early retirement.

Amend the method of calculating the average monthly salary for social insurance contributions to calculate pensions for employees subject to the salary regime prescribed by the State in the direction of having a roadmap to calculate the average of the entire contribution period like employees subject to the salary regime decided by the employer (average of 5 years, 6 years, 8 years, 10 years, 15 years, 20 years or of the entire period depending on the time of starting to participate in social insurance).

Adjusting the salary for which social insurance has been paid for those who start participating in social insurance from the effective date of the amended Law on Social Insurance based on the cost of living index of each period applicable to all employees, regardless of whether they are in the state or non-state sector.

Regarding the retirement age for employees working under normal conditions, it remains the same as the provisions of the 2006 Social Insurance Law and the 2012 Labor Code, specifically 60 years old for men and 55 years old for women. Particularly for employees with high technical expertise, employees working in management positions and some other special cases, they can retire at a higher age but not more than 5 years later than the age of 60 for men and 55 for women.

Conditions on social insurance payment period to receive pension, the 2014 Social Insurance Law maintains the regulation on the minimum social insurance payment period to receive pension for general subjects is to pay social insurance for at least 20 years. Particularly for female workers who are full-time or part-time workers at the commune level, when retiring, they only need to have paid social insurance for at least 15 years and be 55 years old to receive pension.

About the death benefit

In addition to funeral benefits, relatives of workers are entitled to monthly or one-time death benefits.

The amended Law on Social Insurance supplements regulations allowing relatives of employees who are eligible for monthly death benefits to choose to receive a one-time death benefit (except for some cases such as children under 6 years old, children or spouses whose working capacity is reduced by 81% or more), and at the same time increases the one-time death benefit for relatives of employees who are paying social insurance or are reserving their social insurance payment period, calculated by 2 months of the average monthly salary for social insurance payment for the years of social insurance payment from 2014 onwards (currently 1.5 months).

Thus, with the above regulation, the one-time or monthly death benefit for the employee's relatives has been additionally calculated to ensure that it is commensurate with the time the employee previously paid social insurance.

On the level and method of compulsory social insurance payment

The revised Law on Social Insurance still maintains the regulations on contribution rates and methods of compulsory social insurance payment for employees and employers to ensure the balance between social insurance payment and benefits.

In addition, to limit the situation of enterprises evading social insurance payments for employees, the amended Law on Social Insurance has additional provisions on the provision of information on social insurance participation to employees through regulations on the rights of employees to be granted and manage their social insurance books, to request employers and social insurance agencies to provide information on social insurance payment and benefits; every 6 months, employers are provided with information on social insurance payments; annually, social insurance agencies confirm social insurance payments, thereby allowing employees to monitor their own social insurance participation process of their employers, and to proactively report to competent authorities in case their social insurance benefits are violated.

To help the Social Insurance agency strengthen the management of subjects, the amended Law on Social Insurance stipulates the right of the Social Insurance agency to be sent a copy of the business registration certificate, operating license, operating certificate or establishment decision by the business registration agency, the agency issuing the operating certificate or operating license to register employees to participate in social insurance; every 6 months, the local State labor management agency shall provide information on the situation of labor use and changes in the area, the tax agency shall provide the tax code of the employer; annually, information on salary costs for calculating taxes of the employer shall be provided; the Social Insurance agency is authorized to conduct specialized inspections of social insurance contributions...

About voluntary social insurance policy

The amended Law on Social Insurance stipulates the expansion of the subjects participating in voluntary social insurance in the direction of not controlling the maximum age of participation. Accordingly, employees who are Vietnamese citizens from 15 years of age and above and are not subject to compulsory social insurance, if they wish, can participate in voluntary social insurance and when eligible, they will receive retirement and death benefits.

Thus, farmers who voluntarily participate in social insurance and meet the age and social insurance payment period requirements will also enjoy retirement benefits like civil servants, public employees and other workers.

At the same time, the amended Law on Social Insurance stipulates that the State has a policy to support social insurance premiums for voluntary social insurance participants. Based on socio-economic development conditions and the State budget capacity in each period, the level of support, the subjects of support and the time of implementation of the policy to support social insurance premiums for employees participating in voluntary social insurance are determined.

Thus, the specific support level will be considered and decided by the Government based on socio-economic conditions and State budget capacity in each period.

Regarding the work of closely inspecting and supervising the management and use of the social insurance fund to avoid losses, the amended Law on Social Insurance specifically stipulates the responsibilities of the Minister of Labor, War Invalids and Social Affairs, the Minister of Finance, and People's Committees at all levels in implementing State management of social insurance; Supplementing the Financial Inspectorate to perform the function of specialized inspection on social insurance financial management; Supplementing the Social Insurance agency to perform the function of specialized inspection on social insurance, unemployment insurance and health insurance contributions; Supplementing the right of trade union organizations to file lawsuits in court against violations of the law on social insurance that affect the legitimate rights and interests of employees and labor groups; Supplementing the rights and responsibilities of the Vietnam Fatherland Front and its member organizations in propagating, mobilizing, and supervising the implementation of policies and laws on social insurance.

Thus, with the above-mentioned amended and supplemented provisions in the 2014 Social Insurance Law, the social insurance regimes and policies have been completed and basically met the requirements and aspirations of the majority of voters and workers when participating and contributing opinions to the draft revised Social Insurance Law.

According to Chinhphu.vn