Pensions for pre-1995 retirees will be adjusted to increase for about 230,000 people.

In the draft Decree adjusting pensions, social insurance benefits and monthly allowances, in addition to adjusting according to the general rate for all beneficiaries of pensions and monthly allowances, the Ministry of Labor, War Invalids and Social Affairs also proposed additional adjustments for those receiving pensions and allowances before January 1, 1995 with a benefit level of less than VND 3,000,000/month.

Pension payment at one point in Hanoi.

This is a preferential policy of the State for those who have worked and contributed in the State sector before 1995 with a lower benefit level than the general level.

The last time the Government adjusted this policy was from January 1, 2022, according to the provisions of Decree No. 108/2021/ND-CP adjusting pensions, social insurance benefits and monthly allowances.

Specifically, for those who retired before January 1, 1995, after the 7.4% increase, and whose benefit level is less than VND 2.3 million/month, the benefit level will be increased by VND 200,000/person/month. Accordingly, the benefit level above VND 2.3 million/person/month and below VND 2.5 million/person/month will be increased by VND 2.5 million.

According to the Ministry of Labor, War Invalids and Social Affairs, from the practical implementation of social insurance policies for beneficiaries of pensions and monthly allowances before January 1, 1995, it shows that the pension and monthly allowance levels have been determined based on the actual working time and the monthly salary before the employee quits the job.

However, due to the specific nature of the wage policy before 1995, along with the provisions of the law on social insurance at that time, most of the workers retired or quit their jobs due to loss of working capacity with a short working time and low salary before quitting. This affected the general level of pension and monthly allowances of this group of people.

In addition, some groups of beneficiaries have stopped receiving benefits according to regulations, then the state issued a policy to continue receiving monthly benefits from the state budget, so the benefit level is quite low compared to the general level (the monthly social insurance benefit level of beneficiaries according to Decision No. 91/2000/QD-TTg and Decision No. 613/QD-TTg is 1,443,633 VND/person/month).

Implementing Resolution No. 28-NQ/TW on reforming social insurance policies "paying attention to appropriate adjustments for groups of subjects with low pensions and those who retired before 1995 to narrow the pension gap between retirees in different periods and Resolution No. 69/2022/QH15 of the National Assembly "further support for those who retired before 1995 with low benefits", the Ministry of Labor - Invalids and Social Affairs proposed to adjust the subjects of adjustment for those who retired before January 1, 1995 after making adjustments according to general regulations with benefits below 3 million VND/person/month.

According to this Ministry, the determination of the threshold of 3 million VND/person/month as the basis for adjustment is calculated based on the level of 2.5 million VND/person/month stipulated in Decree No. 108/2021/ND-CP, and the adjustment is made by increasing by 20.8% according to the increase in the basic salary and social security policies currently associated with the basic salary according to Resolution No. 69/2022/QH15.

Therefore, the Ministry of Labor, War Invalids and Social Affairs proposes to adjust the absolute amount. Specifically, those who receive pensions, disability benefits and monthly allowances before January 1, 1995, after being adjusted to increase by 12.5% ​​according to the general adjustment level, but whose benefit level is lower than 3 million VND/month, the benefit level will be adjusted to increase by 300,000 VND/person/month for those with a benefit level of 2.7 million VND or less. Increase by 3 million VND for those with a benefit level from 2.7 million VND to less than 3 million VND.

Assessing the impact, the Ministry of Labor, War Invalids and Social Affairs said that implementing the above solution, in addition to spending the state budget to adjust the general pension for the target groups, the state budget will have to balance additional funding to make adjustments for the group with low pension levels of less than 3 million VND/month.

It is expected that about 230,000 people receiving pensions and monthly allowances before January 1, 1995 will be subject to adjustment because the state budget will only pay for about 330 billion VND.

According to Tin Tuc newspaper