Decree to increase 8% salary for retirees is about to be issued

“Adjust 8% increase in pension and monthly allowance for employees receiving pension and monthly allowance in the period from January 1, 2015 - before May 1, 2016. Those who retire after May 1, 2016 will have their pension calculated based on the new basic salary of VND 1,210,000 and regulations of the Social Insurance Law”.

Pensions are a support for many workers in their old age.

This is an important content in the Draft Decree that has just been completed by the Ministry of Labor, Invalids and Social Affairs and submitted to the Government for promulgation to adjust pension levels, labor disability allowances, and monthly allowances.

Increase 8% for retirees from January 1, 2015 to April 30, 2016

It is expected that this Decree will be issued as soon as possible to ensure the rights of the group of people who have just retired in the period from January 1, 2015 to April 30, 2016.

The Draft Decree clearly states: Adjusting the monthly pension and allowance level by 8% for those who start receiving monthly pension and allowance from January 1, 2015 to before May 1, 2016.

The group of beneficiaries of the above mentioned policy includes: Cadres, civil servants, workers, public employees, laborers, soldiers, people's police and people working in key positions who are receiving monthly pensions; commune, ward and town cadres as prescribed in Decree No. 92/2009/ND-CP dated October 22, 2009, Decree No. 121/2003/ND-CP dated October 21, 2003 and Decree No. 09/1998/ND-CP dated January 23, 1998 of the Government who are receiving monthly pensions and allowances.

"As expected, from May 1, 2016, the pension and monthly allowance levels of the subjects that were previously adjusted to increase by 8% will remain unchanged" - quoted from the Draft.

The draft Decree clearly states that the adjustment time is calculated from the month when the pension and monthly allowance begin to be received. For those who have been adjusted up by 8% according to Decree No. 09/2015/ND-CP dated January 22, 2015 of the Government, the benefit level remains the same.

At the same time, employees with social insurance payment period who are subject to the salary regime prescribed by the State and retire from May 1, 2016 onwards, their pensions will be calculated on the new basic salary of VND 1,210,000/month according to the calculation method prescribed in the Law on Social Insurance.

Those receiving less than 2 million VND/month in subsidies will receive increased support.

In addition to the above subjects, the Draft Decree also clarifies a number of regulations and pension calculation levels for a number of other subjects.

Accordingly, for employees with pension, disability allowance and monthly allowance lower than 2,000,000 VND/month, the benefit level will be adjusted from January 1, 2016 for those receiving it before January 1, 2016 and calculated from the month of starting to receive pension, monthly allowance for those receiving it in the period from January 1, 2016 to December 31, 2016. There are currently 2 expected adjustment levels.

"In the case of preschool teachers who have worked in preschool education establishments before January 1, 1995, and are receiving pensions before January 1, 2016, and preschool teachers who have worked in preschool education establishments before January 1, 1995 and retire between January 1, 2016 and December 31, 2016, from January 1, 2016, if the pension level after being adjusted according to regulations is lower than the basic salary, they will be given additional allowances so that the pension is equal to the basic salary" - excerpt from the Draft.

First adjustment level: Increase by 250,000 VND/person/month for those with pension from 1,750,000 VND/person/month or less; increase by 2,000,000 VND/person/month for those with pension from over 1,750,000 VND/person/month to under 2,000,000 VND/person/month.

Second adjustment level: Increase by 150,000 VND/person/month for those with a monthly allowance for loss of working capacity or a monthly allowance of 1,850,000 VND/person/month or less; increase by 2,000,000 VND/person/month for those with a monthly allowance for loss of working capacity or a monthly allowance of over 1,850,000 VND/person/month to under 2,000,000 VND/person/month.

The level of pension, disability allowance, and monthly allowance after adjustment according to the provisions of this Article shall be the basis for calculating pension and allowance adjustments in subsequent adjustments.

Thus, when officially issued, the above Draft will fill a "gap" in policy support for the group of retirees in the period from January 1, 2015 to April 30, 2016.

Previously, the regulations on increasing pensions and monthly allowances by 8% only applied to those who retired or quit their jobs before January 1, 2015.

Meanwhile, from May 1, 2016, the basic salary will increase from 1,050,000 to 1,210,000 VND. Those who retire from now will benefit more because their pension will be calculated based on the new basic salary and the regulations of the Social Insurance Law.

According to Dan Tri