Proposal to increase compulsory social insurance contributions for military and police students

The Ministry of National Defense is drafting a Decree detailing and implementing measures for a number of articles of the Law on Social Insurance (SI) on compulsory social insurance for soldiers, police officers and people working in key positions who receive salaries similar to those of soldiers. The policy is expected to be implemented from July 1.

The drafting agency proposes that the salary used as the basis for compulsory social insurance contributions for non-commissioned officers and soldiers in the army; non-commissioned officers and soldiers on duty in the people's public security; military, police and cryptographic students currently studying are entitled to living expenses; and regular militiamen will gradually increase over time.

Specifically, the contribution level for the first 2 years - corresponding to the service time of non-commissioned officers and soldiers - is 2 times the reference level, then each subsequent year increases by 0.5 times and is up to 4 times the reference level. The current reference level is 2.34 million VND.

With this proposal, the salary used as the basis for calculating compulsory social insurance contributions for the groups in the first two years is 4.68 million VND per month; each year thereafter, it will increase by 1.17 million VND per month, with the maximum contribution not exceeding 9.36 million VND per month. The above amount is calculated in the case of remaining the same reference; depending on socio-economic conditions and the annual budget, the Government will adjust.

The Ministry of National Defense explained that under current regulations, the social insurance contribution rate for this group is calculated based on the basic salary or minimum salary with a coefficient of 1.0. This low contribution rate, lasting for about 4-7 years depending on the training major, may affect the pension benefits of soldiers later. Therefore, the adjustment is necessary to overcome this limitation.

This new proposal is consistent with the revised Law on Social Insurance, which stipulates that the social insurance contribution rate will be based on salary and allowances. The gradual increase in contribution rate, up to a maximum of 4 times the reference level, is considered reasonable for specialized training sectors (5-7 years) such as military medicine and pilots, and does not exceed the starting salary coefficient of officers.

Using the reference level as a basis for calculation also facilitates adjustment according to the socio-economic situation and ensures long-term social insurance benefits for soldiers when they change careers or retire.

One point worth noting is that the way to calculate the average salary for social insurance contributions to enjoy retirement benefits under the new law will significantly impact the group of non-commissioned officers and soldiers enlisted from January 1, 2016 onwards, because their current contribution rate is only a coefficient of 1.0.

The revised Law on Social Insurance stipulates a roadmap for calculating the average salary for social insurance contributions for state-owned employees receiving pensions, with those participating from January 1, 2016 to December 31, 2019 being the average of the last 15 years, from January 1, 2020 to December 31, 2024 being the average of the last 20 years, and from January 1, 2025 onwards being the average of the entire participation period. The Law also uses a reference level to calculate a number of other regimes.

Therefore, the drafting committee proposed to increase the salary for social insurance contributions according to the roadmap, with the starting level equivalent to the minimum salary of region 1, partly reflecting the specific nature of the armed forces, and the maximum level is 4 times the reference level suitable for long-term training sectors but not exceeding the coefficient of 4.2 for officers upon graduation.

The regular training period at military and police schools usually lasts about 4 years, and can be up to 5-7 years for specialized fields such as pilot training and military medicine. The term of service for non-commissioned officers, soldiers of the army and non-commissioned officers, conscripts of the people's police is 24 months and can be extended but not more than 6 months for conscripted police.