The pension rate for male workers is at least 40%

At the press conference on July 30, Mr. Nguyen Duy Cuong, Deputy Director of Social Insurance Department, explained how to calculate the pension rate for male workers who have participated in social insurance for 15 years but less than 20 years.

According to the provisions of the amended Law on Social Insurance, male workers who reach retirement age and have paid social insurance for 15 years will receive 40% of their average monthly salary. From 16 to 20 years, each year will be calculated with 1%. From the 20th year onwards, the pension rate is 45%, with each year of payment adding 2% until the maximum benefit is 75%.

Female workers who reach retirement age and have paid social insurance for 15 years will receive 45% of their average base salary. Each year thereafter, they will receive an additional 2% until reaching the maximum rate of 75%.

Mr. Cuong said that the average pension rate for each year of social insurance participation in countries around the world is about 1.7%; China and South Korea are about 1%. In Vietnam, this rate according to current law is 2.14% for men and 2.5% for women. The amended law inherits and does not change the general pension calculation formula, but adds a way to calculate the rate of benefits for male workers who have participated in social insurance for 15 years to less than 20 years.

"Because the revised law reduces the number of years of social insurance contributions from 20 to 15, but the current law does not have regulations on calculating the pension rate for this group, the Drafting Committee has added it," he said, adding that the adjustment aims to absorb comments from National Assembly deputies and carefully assess the impact and balance of the Pension Fund for Survivors.

According to Mr. Cuong, the benefit rate after being approved has changed, ensuring better pension benefits for male workers compared to the original draft. The benefit rate according to the initial proposal of this group was calculated at 2.25% per year, with 15 years of full contribution receiving 33.75% "which is very low".

Thus, with the same 15 years of social insurance contributions, male workers receive 40% while female workers receive 45%. The pension accumulation rate for men from 15 to under 20 years of contributions is 1% while female workers receive 2%. From the 20th year onwards, the pension rate for both sexes is equal at 2%. To receive the maximum pension of 75%, female workers must contribute 30 years and male workers 35 years. For those who retire early, the benefit rate is deducted by 2% each year, from 6 to under 12 months, 1% is deducted, and under 6 months, there is no deduction.

The amended Law on Social Insurance was passed by the National Assembly on June 29 and will take effect from July 1, 2025.