New regulations on social insurance payment period to receive pension from July 1

Pension payment organization. (Photo: PV/Vietnam+) — Pension payment organization

The Social Insurance Law 2024 takes effect today, July 1, in which the minimum period of social insurance contributions to receive pension has been reduced from 20 years to 15 years. However, in some cases, employees who are of retirement age but have not paid enough years still have the opportunity to access pension.

15 years of social insurance payment will receive pension

Inheriting current regulations, the Social Insurance Law 2024 continues to provide regulations to help late social insurance participants have the opportunity to receive pensions.

The law stipulates that employees who meet the retirement age requirements but have not paid compulsory social insurance for 15 years can also receive a pension. However, the law stipulates that employees must have paid compulsory social insurance for at least 14 years and 6 months, and the remaining months (6 months) can be paid in one lump sum to reach 15 years of social insurance participation.

The monthly contribution is equal to the total contribution of the employee and the employer before the employee leaves the job.

The earliest time to make a one-time payment for the missing months is the month immediately preceding the month eligible for pension according to regulations.

Notably, the Social Insurance Law 2024 stipulates that people who have worked in arduous, toxic and dangerous environments for 15 years or more or have reduced working capacity can retire 5-10 years earlier, depending on the case. However, the condition for workers in this group to retire, in addition to meeting the age requirement, is that they must have paid social insurance for 15-20 years, depending on the case.

The provisions of the new Social Insurance Law help many people have the opportunity to access pensions.

For example, Mr. K. retired in April 2027 when he turned 55. He paid social insurance for 30 years, of which 15 years were spent in a heavy, toxic, or dangerous job; his working capacity was reduced by 81%.

Mr. K's pension rate is calculated as follows: The first 20 years are calculated at 45%; from the 21st year to the 30th year is 10 years, plus: 10 x 2% = 20%; the total of the two above rates is: 45% + 20% = 65%.

Mr. K. retired 1 year and 9 months early, so the deduction rate due to early retirement is 2% + 1% = 3%. Thus, Mr. K.'s monthly pension rate is 65% - 3% = 62%.

For voluntary social insurance participants, the new Social Insurance Law also stipulates a reduction in the minimum number of years of social insurance contributions to receive pensions for this group from 20 years to 15 years. However, employees need to pay directly for 10 years, the remaining amount is 5 years and can be paid at once.

The above provisions of the Law on Social Insurance help many people have the opportunity to access pensions.

How to calculate retirement benefits

The new Social Insurance Law stipulates that the maximum pension level for employees is 75% of the average salary used as the basis for payment, corresponding to 35 years of social insurance payment for men and 30 years of social insurance payment for women.

Each year of social insurance payment exceeding 35 years for men and 30 years for women before reaching retirement age as prescribed is calculated at 0.5 times the average salary used as the basis for social insurance payment.

Each year of social insurance payment exceeding 35 years for men and 30 years for women after reaching retirement age as prescribed is calculated as 2 times the average salary used as the basis for social insurance payment.

According to the provisions of the Law on Social Insurance, the benefit level for male workers is equal to 45% of the average salary used as the basis for social insurance contributions corresponding to 20 years of participation.

For example, Mr. D. works under normal working conditions, at the time of retirement age, he has paid social insurance for 38 years, but Mr. D. does not retire to receive a pension but continues to work and pay social insurance for 3 more years before retiring to receive a pension. When he retires to receive a pension, Mr. D. has a total time of paying social insurance for 41 years.

Thus, in addition to his pension, Mr. D. is also entitled to a one-time benefit calculated as follows: 3 years of social insurance contributions greater than 35 years before retirement age, each year is equal to 0.5 times the average salary used as the basis for social insurance contributions: 3 years x 0.5 = 1.5.

3 years of social insurance payment is more than 35 years after retirement age, each year is equal to 2 times the average salary used as the basis for social insurance payment: 3 years x 2 = 6.

Thus, Mr. D. is entitled to a one-time pension upon retirement equal to 7.5 (1.5 + 6) times the average salary used as the basis for social insurance contributions.

According to the provisions of the Law on Social Insurance, the benefit level for male workers is equal to 45% of the average salary used as the basis for social insurance contributions corresponding to 20 years of participation. Each subsequent year of contribution is added 2% until the maximum benefit rate reaches 75%, corresponding to 35 years of participation.

Female workers working under normal conditions, reaching retirement age, are calculated at 45% of the average salary used as the basis for social insurance contributions, corresponding to 15 years of participation. Each subsequent year of accumulation is added 2% until reaching a maximum of 75%, corresponding to 30 years of participation.

VN (according to Vietnam+)

Source: https://baohaiphongplus.vn/nhung-quy-dinh-moi-ve-thoi-gian-dong-bao-hiem-xa-hoi-de-huong-luong-huu-tu-1-7-415395.html