Saturday, November 25 2017

VietNamNews

New pension plan to affect men and women

Update: November, 14/2017 - 12:00
Phạm Lương Sơn
Viet Nam News

Phạm Lương Sơn, deputy director general of Việt Nam Social Security tells the chinhphu.vn that women don’t have to worry about lower benefits under new pension calculations starting January 1, 2018.

What are some of the main changes in the ways pension will be calculated from January 1, 2018?

Under clause 2 of Article 56 of the 2014 Law on Social Insurance, the new pension calculations will take effect on January 1, 2018.

Under existing law, men and women who have contributed social insurance premiums for a minimum of 20 and 15 years respectively are eligible for a replacement rate of 45 per cent of their average monthly wages. For every additional year, men and women receive a two and three per cent increment, respectively, until it reaches the maximum of 75 per cent. The new law changes the increment to two per cent per every additional year for both men and women.

Another change has to do with eligibility to receive the maximum pension benefit of 75 per cent of average monthly wages. Under current law, to receive 75 per cent of the average monthly salary as pension, a woman must be at least 55, retire before January 1, 2018, and have paid social insurance premiums for at least 25 years. The corresponding time period for males is 30 years. The new formula increases it to 30 years for women from next year, while giving men a yearly increment of one per cent to reach 35 per cent by 2022.

The new pension plan has caused a lot anxiety among female employees. How would you respond to their complaints?

I don’t think that the adjustments contained in the 2014 Law on Social Insurance will have major impacts on the pension rate for men and women.

In a meeting with the Department of Social Insurance under the Ministry of Labour, Invalids and Social Affairs last October, we discussed a plan to adjust the retirement benefits of female employees. Under this proposal, for a female employee to get a replacement rate of 75 percent of her salary in 2018, she must have contributed social insurance premiums for at least 26 years, 27 years in 2019, 28 in 2020, 29 in 2021 and 30 in 2022. 

So, under the new pension plan, to get a 75 per cent replacement rate, but men and women will have to increase their social insurance contributions by five years by 2022.

Some people have said that the new retirement policy will affect millions of female pensioners. Is that true?

No, I don’t think so. The new plan will affect both male and female employees.

It is estimated that about 57,500 female employees will retired in 2017, 49,700 in 2018, excluding those who retire earlier. It has also been estimated that the new retirement benefits will affect some 21,000 female employees. So reports and or fears that the new retirement policy will negatively affect millions of female pensioners are totally groundless.

On November 3, President of the Vietnam General Confederation of Labour wrote to the National Assembly Committee, the NA Chairwoman and the NA Committee on Social Affairs requesting the parliament to consider the revising women’s pensions to provisions contained in the 2006 Law on Social Insurance.

Just a day earlier, the Government Office sent an official letter to the Ministry of Labour, Invalids and Social Affairs to consider a new plan for calculating pensions for male workers.

We at Việt Nam Social Security support the Government’s view on this issue. However, if any changes are made, we will strictly follow those. The National Assembly will be the agency to make the final decision. —­ VNS

Send Us Your Comments:

See also: