Change in pension calculation method from July 1, 2025

Social Insurance Law No. 41/2024/QH15 (Social Insurance Law 2024), effective from July 1, 2025, with many important changes in social insurance policy, including adjusting the calculation of monthly pension benefits.

According to the provisions of the Social Insurance Law 2014 (expiring from July 1, 2025), the minimum pension rate is 45% with the condition of 20 years of social insurance contribution for men and 15 years for women.

However, with the 2024 Social Insurance Law reducing the time requirement for social insurance contributions to 15 years to receive pensions for both men and women, the method of calculating pensions has also been adjusted.

Specifically, the calculation of the new pension level according to the Social Insurance Law 2024 is as follows:

For female workers : 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 contribution, the benefit rate will be calculated by 2%, with a maximum of 75% corresponding to 30 years of social insurance contribution.

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 contribution, the benefit rate will be calculated by 2%, with a maximum of 75% corresponding to 35 years of social insurance contribution.

A notable point compared to the 2014 Social Insurance Law is the regulation that for male workers 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 each additional year of payment will be calculated by adding 1%. This is an important change, creating conditions for many male workers with a shorter social insurance payment period to still have the opportunity to receive a pension.

The adjustment of the Social Insurance Law 2024 in calculating pension benefits, especially reducing the minimum social insurance contribution period to 15 years, brings great opportunities for those who participate in social insurance late or have not participated continuously. Instead of having to receive social insurance in one lump sum due to not meeting the contribution period requirement to receive monthly pension, workers now have the opportunity to accumulate 15 years of contributions to receive pension and ensure their life when they retire.

This new regulation demonstrates the flexibility and humanity of the social insurance policy, aiming to expand the coverage of social insurance and ensure long-term social security benefits for employees. Employees need to understand these changes to have a suitable social insurance participation plan, ensuring their retirement benefits in the future.

Source: https://baothainguyen.vn/van-ban-chinh-sach-moi/202507/thay-doi-cach-tinh-luong-huu-tu-172025-21f2716/