How many years of social insurance contributions are required to receive the maximum pension?

Women contribute for 30 years, men contribute for 35 years to reach the maximum rate of 75%

Article 66 of the 2024 Law on Social Insurance stipulates that for female workers, the monthly pension is calculated at 45% of the average salary used as the basis for social insurance contributions, corresponding to 15 years of social insurance contributions. After that, for each additional year of contribution, the rate increases by 2 percentage points, with a maximum of 75%.

Accordingly, a female worker who has contributed to social insurance for 20 years is calculated at a rate of 55%; 25 years is 65% and with 30 years she will reach 75%. This is also the ceiling, so continuing to contribute after the 30-year mark does not increase the pension rate to 77%, 79% or higher.

For male workers, the formula is different. Those with 20 years of social insurance contributions are calculated at a rate of 45%; from then on, each additional year adds 2 percentage points. Thus, 25 years corresponds to 55%, 30 years is 65%, 34 years is 73% and 35 years of social insurance contributions will reach the maximum of 75%.

Notably, for male workers with a contribution period from 15 years to less than 20 years, a new calculation method is applied: 15 years corresponds to 40% of the average salary used as the basis for social insurance contributions, then each additional year adds 1 percentage point. Therefore, a person who contributes for 16 years is calculated at 41%, 17 years at 42%, 18 years at 43%, 19 years at 44% and at 20 years reaches 45%.

Contributing for 15 years is enough to meet the time condition for a pension

The 30-year mark for women and 35 years for men does not mean that workers have to wait until they have reached this number of years to receive a pension.

A notable change in the 2024 Law on Social Insurance is the reduction of the minimum period of social insurance contributions to be eligible for a pension from 20 years to 15 years for cases meeting the normal retirement conditions. Article 64 stipulates that workers in the corresponding group, when they stop working and have 15 years or more of compulsory social insurance contributions, and have reached the statutory retirement age, can receive a pension.

Vietnam Social Security said that this change expands access to pensions for those who join social insurance late or have an interrupted participation process. Compared to the old regulation which commonly required at least 20 years of social insurance contributions, people who have only accumulated from 15 to less than 20 years now have an additional opportunity to enjoy retirement benefits when meeting the age condition.

Even with the same 75%, the actual pension amount may still be different

One point workers should note is that 75% is not 75% of the last monthly salary before retirement.

According to the law, the monthly pension is determined based on the pension rate multiplied by the average salary used as the basis for social insurance contributions. Therefore, two people with the same number of years of contributions and the same 75% rate may still receive different pension amounts if their average salary for social insurance contributions is different.

For example, with a female worker eligible for a 75% rate and having an average salary used as the basis for social insurance contributions of VND 10 million/month, the illustrative calculation for the pension is VND 7.5 million/month. If a male worker has 30 years of social insurance contributions, the rate according to the normal formula is 65%; with the same average of VND 10 million, the corresponding calculation is VND 6.5 million/month. The actual amount for each person will be determined by the social insurance agency on the basis of the dossier and contribution history.

Illustrative image

For those who continue to contribute beyond the threshold to reach 75%, the benefits are not lost. Article 68 of the 2024 Law on Social Insurance stipulates that male workers who contribute for more than 35 years and female workers for more than 30 years, when retiring, in addition to the pension, are also entitled to a one-time allowance. Each year of excess contribution up to the time of reaching retirement age is calculated as 0.5 times the average salary used as the basis for social insurance contributions. If they have already met the conditions for a pension but continue to contribute to social insurance, the excess period after the time of reaching retirement age is calculated as an allowance at the rate of 2 times the average salary for each year as prescribed.

Source: CafeF