Joint Circular No. 01/2000/TTLT-BLDTBXH-BTC guiding the adjustment of pension levels and social insurance benefits pursuant to Government Decree No. 175/1999/NĐ-CP dated December 15, 1999.

JOINT CIRCULAR

Guidelines for Implementing Adjustments to Pensions and Social Insurance Benefits According to Decree No. 175/1999/NĐ-CP dated December 15, 1999 of the Government

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To implement Decree No. 175/1999/NĐ-CP dated December 15, 1999 of the Government on adjusting the minimum wage levels, allowances, and living expenses for individuals receiving pensions, subsidies, and living expenses from the State budget, after reaching consensus with the Central Organization Committee, the Government Civil Service Organization Board, and the Joint Ministry of Labor, War Invalids and Social Affairs - Ministry of Finance, the following guidelines for implementing adjustments to pensions and social insurance benefits are hereby provided:

I. APPLICABLE OBJECTS:

The subjects eligible for adjustments to their pensions and social insurance benefits as stipulated in Clause 3, Article 1 of Decree No. 175/1999/NĐ-CP dated December 15, 1999 of the Government include: persons receiving pensions (including civil servant and military pensions, police pensions); disability allowances; rubber worker allowances; sickness allowances; maternity allowances; work injury and occupational disease allowances; survivor benefits; village and ward cadres who have retired and are receiving allowances under Decree No. 09/1998/NĐ-CP dated January 23, 1998 of the Government.

II. CALCULATION OF ADJUSTED PENSION LEVELS AND SOCIAL INSURANCE BENEFITS:

The subjects mentioned above in Section I shall have their pension levels and social insurance benefits recalculated as follows:

1. Persons currently receiving pensions; disability allowances; work injury and occupational disease allowances; rubber worker allowances; monthly survivor benefits; and allowances for village and ward cadres as specified in Clause a, Article 4 of Decree No. 09/1998/NĐ-CP dated January 23, 1998 of the Government before January 1, 2000 shall have their pension or allowance recalculated as follows:

2. For those starting from January 1, 2000 and thereafter begin to receive pensions or social insurance benefits, they shall enjoy the following:

a. Individuals who have retired and have contributed to social insurance based on the salary scales established by the State shall have their pension calculated based on the adjusted salary levels according to the minimum wage of 180,000 VND/month as stipulated in Decree No. 175/1999/NĐ-CP dated December 15, 1999.

Example:

A cadre retiring in February 2000 had the following salary contribution history for the last five years before retirement:

- From February 1995 to January 1998, the wage coefficient is 3.35

- From February 1998 to January 2000, the wage coefficient is 3.63

The method for calculating the average wage contribution to social insurance as the basis for calculating the pension is as follows:

- From February 1995 to January 1998, the total wage amount calculated according to the coefficient:

3.35 x 180,000 VND x 36 months = 21,708,000 VND

- From February 1998 to January 2000, the total wage amount calculated according to the coefficient:

3.63 x 180,000 VND x 24 = 15,681,600 VND

The total wage contribution to social insurance over the last five years before retirement is: 21,708,000 VND + 15,681,600 VND = 37,389,600 VND

The average wage contribution to social insurance as the basis for calculating the pension is:

37,389,600 VND : 60 months = 623,160 VND

b. Individuals who have retired and have contributed to social insurance both based on the salary scales established by the State and based on non-scale wages shall have their average salary over the last five years in the public sector calculated based on the minimum wage of 180,000 VND/month for the period of contribution based on the salary scales established by the State.

c. For village and ward cadres who have retired and are receiving allowances as stipulated in Article 4 of Decree No. 09/1998/NĐ-CP dated January 23, 1998 of the Government, the allowance shall be calculated based on the adjusted living expense level as prescribed in Circular No. 54/1999/TTLB-BTCCCP-BTC dated December 29, 1999 of the Joint Office of the Government Civil Service Organization Board - Ministry of Finance.

d. Individuals receiving sickness, maternity, work injury, occupational disease, survivor benefits, or one-time social insurance allowances shall have their allowances calculated based on the adjusted salary or living expense level according to the minimum wage of 180,000 VND.

Specifically, for individuals who suffered work injuries or occupational diseases before January 1, 2000, or who retired and received one-time allowances, sickness allowances, or maternity allowances, or died before January 1, 2000 but still had remaining entitlement periods, the allowances shall be calculated as follows:

- For individuals who were treated for work injuries or occupational diseases and discharged from hospital before January 1, 2000, the one-time allowance shall be paid at the December 1999 allowance rate. In cases where treatment began before January 1, 2000 and discharge occurred after January 1, 2000, the allowances shall be paid based on the recalculated allowance rate according to the minimum wage of 180,000 VND/month.

- For individuals who retired due to sickness or maternity leave before January 1, 2000 but still had remaining entitlement periods for sickness or maternity leave after 2000, the allowance for periods of leave starting from January 1, 2000 shall be calculated based on the minimum wage of 180,000 VND/month.

- For persons who died before January 1, 2000 but whose funeral expenses and one-time benefits have not yet been paid, these shall still be paid at the December 1999 benefit level.

- For individuals who retired and received one-time social insurance allowances before January 2000 but whose decision to receive such allowances was made by the Social Insurance Authority after January 2000, the allowance shall be calculated based on the minimum wage of 180,000 VND/month.

e. For individuals who have retired or left service due to disability and are entitled to additional allowances as stipulated in Decision No. 812/TTg dated December 12, 1995, from January 1, 2000, the additional allowance shall be calculated based on the minimum wage of 180,000 VND/month.

f. For individuals who are single pensioners entitled to an additional allowance of 180,000 VND/month as stipulated in Decision No. 812/TTg dated December 12, 1995 of the Prime Minister, from January 1, 2000, this allowance shall be adjusted to 270,000 VND/month.

g. Any regional allowance (if applicable) for persons receiving pensions or social insurance benefits shall be calculated based on the minimum wage of 180,000 VND/month from January 1, 2000.

III. IMPLEMENTATION

1. The Ministry of Labor, Invalids and Social Affairs shall coordinate with the Ministry of Finance to guide, inspect, and resolve any difficulties encountered by ministries, sectors, localities, and grassroots units during the implementation of this Circular.

2. The Ministry of Finance shall review and allocate the pension fund and additional allowances for beneficiaries receiving social insurance from the State budget.

3. The Vietnam Social Security shall direct units to implement and prepare reports as follows:

a. Prepare a report on the number of beneficiaries and the increased pension and social insurance benefit fund that the State budget must cover, and submit it to the Ministry of Finance for review, while also sending a copy to the Ministry of Labor, War Invalids and Social Affairs by February 2000.

b. Implement the adjustment and payment of increased amounts for beneficiaries receiving pensions and social insurance benefits covered by the State budget and the social insurance fund. Implement social insurance contributions based on the adjusted minimum wage as stipulated in Decree No. 175/1999/NĐ-CP dated December 15, 1999 of the Government.

4. Ministries, central agencies, provincial People's Committees, and municipal People's Committees directly under the central government shall instruct relevant agencies, units, Departments of Labor, War Invalids and Social Affairs, and Departments of Finance and Prices to inspect and urge the implementation of the provisions of this Circular.

5. This Circular takes effect from January 1, 2000.

During the implementation process, if there are any difficulties, please reflect them to the Joint Ministries for study and resolution./.