Question:
Mr. M was born on April 7, 1960, and is a worker in our company. His retirement age is reached on April 7, 2020. Due to the company’s current difficulties in production and business, on January 1, 2020, Mr. M requested an early retirement before the stipulated retirement age of April 7, 2020. To ensure the completeness and continuity of his social insurance contributions, Mr. M voluntarily covered the contributions for January, February, and March 2020 from his own pocket (thus making a total of 40 years of social insurance contributions).
We kindly request guidance from the Ho Chi Minh City Department of Labor, War Invalids, and Social Affairs, as well as the Social Insurance of Ho Chi Minh City, on the following matters:
How will Mr. M’s pension be calculated?
What procedures does our company need to undertake to ensure that Mr. M receives his pension on April 7, 2020?
Answer:
The Ho Chi Minh City Social Insurance Office responds to the above questions regarding the calculation of Mr. M’s pension as follows:
1. Calculation method for pension:
Pension = Average monthly salary for the period of social insurance contribution x % pension
where:
– Pension percentage:
For males: 45% corresponds to the number of years of contribution according to the table below, then an additional 2% is calculated for each subsequent year of contribution; the maximum rate is 75%.
| Year of retirement | Time of payment of social insurance corresponding to the rate of 45% |
| 2020 | 18 years |
| 2021 | 19 years |
| 2022 onwards | 20 years |
If Mr. M has 40 years of paying social insurance, the pension rate is 75%.
The average monthly salary paid for social insurance (M) as a basis for calculating pension is as follows:
a) For people whose entire time of paying social insurance is according to the salary regime prescribed by the state:
M = Total monthly salary paid for social insurance of 5 last year before retiring60 months
b) For employees whose entire time of paying social insurance is based on salary decided by the employer:
M = Total monthly salary paid for social insuranceTotal number of months of social insurance payment
c) For employees who both have time to pay social insurance premiums according to the salary decided by the employer and also have time to pay social insurance premiums according to the salary regime prescribed by the State:
M = Total monthly salary paid for social insurance according to the salary regime prescribed by the StateTotal number of months of social insurance payment + Total monthly salary paid for social insurance according to the salary system decided by the employerTotal number of months of social insurance payment
2. Documentation for Pension Application:
– In the case of mandatory participation in Social Insurance at the company:
1) Social Insurance Booklet.
2) Retirement request decision using Form No. 12-HSB or a termination of labor contract document for pension entitlement.
3) Personal declaration regarding the duration and location of military service with regional allowance entitlement using Form No. 04B-HBKV (issued together with Circular No. 181/2016/TT-BQP for individuals who served in the military before January 1, 2007, in areas with regional allowance entitlement not fully indicated in the Social Insurance Booklet, used as a basis for calculating regional allowance).
– In the case of preserving the Social Insurance contribution period:
1) Social Insurance Booklet.
2) Application form using Form No. 14-HSB.
3) Personal declaration regarding the duration and location of military service with regional allowance entitlement using Form No. 04B-HBKV (issued together with Circular No. 181/2016/TT-BQP for individuals who served in the military before January 1, 2007, in areas with regional allowance entitlement not fully indicated in the Social Insurance Booklet, used as a basis for calculating regional allowance).
