The reason why many people receive pensions of only over 1 million VND/month

Low closing level, short closing time

According to Vietnam Social Security (VSS), retirees from Nghe An Farmers' Social Security Fund who transferred to voluntary social insurance under Decision 41/2009/QD-TTg; non-professional commune officials; voluntary social insurance participants who chose the lowest social insurance contribution level... have low pensions.

Vietnam Social Security explained that the lowest pension level is concentrated on the group of farmers in Nghe An participating in the pilot program of paying social insurance for farmers.

By 2009, when Nghe An Farmers' Social Insurance was converted to voluntary social insurance according to Decision 41/2009/QD-TTg, many cases continued to participate in the "safety net" through the form of voluntary social insurance.

When retiring, due to the short contribution period and low monthly social insurance contribution, sometimes only 10,000 VND/month, these cases have low pensions.

In addition, non-professional commune cadres are also in the group of subjects with low pensions. This group has a social insurance contribution level equal to the basic salary, and the period of social insurance contribution to receive pension is short.

At the same time, according to regulations, when retiring, if there are not enough 20 years or more of compulsory social insurance contributions (not including the time of social insurance contributions as non-professional workers in communes, wards and towns), and the pension is lower than the basic salary, the pension will not be fully compensated by the basic salary.

In 2021, the average pension of non-professional commune officials is about 1.3 million VND/month.

For voluntary social insurance participants, the monthly income used as the basis for social insurance contributions (chosen by the participant) is at least equal to the poverty line for rural areas and at most 20 times the basic salary at the time of contribution.

In fact, according to Vietnam Social Security, most people choose an income level corresponding to the regional poverty line. Before 2022, the rural poverty line was 700,000 VND, and from 2022 it will be 1.5 million VND to pay voluntary social insurance.

In fact, the vast majority of voluntary social insurance participants only pay social insurance until they have completed 20 years of service to meet the minimum time requirement to receive a pension. Due to the low social insurance contribution rate and short social insurance contribution period, the average level of this group is low.

In addition, many employees who pay compulsory social insurance due to lack of social insurance payment time to have pension have chosen to pay voluntary social insurance monthly or one-time for the missing time at a low level, so their pension will also be low.

Businesses "circumvent the law", workers... suffer

For those participating in compulsory social insurance, many businesses "circumvent the law" by paying social insurance for employees that is not in accordance with the actual salary and income of the employees.

In some units, the income used as the basis for social insurance contributions for employees is always at the lowest level, leading to a low average pension for employees upon retirement.

Ms. Nguyen Thi N. (born in 1962) has participated in social insurance for 20 years and 3 months, with a pension rate of 61%. However, Ms. N. has spent 2/3 of her time participating in social insurance with a low salary. Specifically, for many years, Ms. N.'s social insurance salary was only 300,000-400,000 VND/month...

When she retired in May 2017, Ms. N. had a salary of VND 1,074,586. After the pension adjustment, by June 2023, the pension amount that Ms. N. received increased to VND 1,600,300.

The above situation shows that although the pension rate is quite high, due to low contribution level; short social insurance contribution period, many workers retire before retirement age... leading to the current average benefit level of many workers is still low.

Currently, the Law on Social Insurance stipulates that salary is the basis for social insurance contributions of employees (including salary and allowances). For some employee benefits (support) of enterprises that are regular and stable in nature, such as: support for gasoline, phone, lunch, housing, etc., current law stipulates that they are not used as the basis for calculating social insurance contributions.

Taking advantage of this regulation, some businesses divide allowances into these support amounts to avoid paying or not paying enough social insurance.

Therefore, in order to ensure the legitimate rights of employees, Vietnam Social Security proposes that competent authorities study the plan when amending the salary used as the basis for social insurance payment in the direction that employees pay social insurance according to the salary regime decided by the employer, the salary used as the basis for social insurance payment is the monthly salary, including salary, salary allowances, and other supplements paid regularly in each salary payment period.

In addition, it is necessary to study to harmonize the 3 types of income of workers and have a legal basis to clearly define their income as the basis for paying social insurance. From there, it will avoid the situation of too large a difference between the income of workers for tax settlement and the actual income paid, creating conditions to ensure the best benefits for them when they retire.

According to Dan Tri