The option to solve variance in pension of female laborers from 01-01-2018


2018-05-22

Under the provisions of Point b, Clause 2 of Article 56, Clause 4 of Article 56 and Point b, Clause 2 of Article 74 in the 2014 Law on Social Insurance, it is start to apply the new percentage to calculate pension from 01st Jan 2018. Accordingly, in order to reach the maximum rate of 75%, female laborers retiring from 01st Jan 2018 onward shall have to contribute social insurance for full 30 years (compared to before 2018 is full 25 years). For male laborers, in order to entitle the maximum rate of 75%, who retire in 2018 must contribute for full 31 years of social insurance, who retire in 2019, 2020, 2021 and 2022, it is full 32 years, 33 years,  34 years and  35 years, respectively (before 2018, only 25 years of social insurance is required). Thus, the pension rate adjustment for male laborers is carried out in 5-year roadmap while there is no roadmap for female laborers which affects the female laborers’ right, especially for laborer who have less than 30 years of social insurance contribution.

To deal with this problem, MOLISA has proposed to the Government the options to adjust and minimize the gap.

Option 1: Delaying the application time of Clause 2 of Article 56 and Clause 2 of Article 74 of the 2014 Law on Social Insurance for female laborers to 2022.

Option 2: Increase the percentage for pension entitlment follow to a roadmap from 2018 to 2022, particularly:

Female laborers shall  equal to 45% of the average monthly salary on which social insurance premiums are based, equivalent to 15 years of social insurance contribution. In case of retirement in 2018, from the 16th year year of paying social insurance to the 23th year of paying social insurance, 3% shall be added each year.  Retirement in 2019, from the 16th year of paying social insurance to the 21th year of paying social insurance, each year is added 3%. Retirement in 2020, from the 16th year of paying social insurance to the 19th year of paying social insurance, each year is added 3%. Retirement in 2021, from the 16th year of paying social insurance to the 17th year of paying social insurance, each year is added 3%; then the monthly pension shall be added with 2% for each additional year of contribution with the maximum is 75%.

From 1st Jan, 2022 onwards, the monthly pension of female laborers shall equal to 45%, , equivalent to 15 years of social insurance contribution; then the monthly pension shall be added with 2% for each additional year of contribution with the maximum is 75%.

With this proposal, the majority of government’s members selected option. Based on this result, MOLISA will draft a report to present to the National Assemblyẻo their consideration on handling the difference amount in pension of female laborers who retire before and after January 1st, 2018.