Joint Circular No. 01/2001/TTLT/BLDTBXH-BTC guiding the implementation of adjustments to pension and social insurance benefits according to Decree No. 77/2000/NĐ-CP dated December 15, 2000 of the Government.

JOINT CIRCULAR

JOINT CIRCULAR NO. 01/2001/TTLT-BLDTBXH-BTC OF THE MINISTRY OF LABOR, WAR INVALIDS AND SOCIAL AFFAIRS AND THE MINISTRY OF FINANCE ON GUIDELINES FOR IMPLEMENTING THE ADJUSTMENT OF PENSION LEVELS AND SOCIAL INSURANCE BENEFITS PURSUANT TO DECREE NO. 77/2000/NĐ-CP OF THE GOVERNMENT DATED DECEMBER 15, 2000

Pursuant to Clause 3, Article 1 of Decree No. 77/2000/NĐ-CP dated December 15, 2000 of the Government on the adjustment of the minimum wage level, benefit levels, and living allowances for those receiving salaries, allowances, and benefits, after reaching consensus with the Central Organization Committee and the Government Civil Service Organization Committee, the Joint Circular of the Ministry of Labor, War Invalids and Social Affairs and the Ministry of Finance provides guidelines for implementing the adjustment of pension levels and social insurance benefits as follows:

I. APPLICABLE SUBJECTS

The subjects eligible for the adjustment of pension levels and social insurance benefits as stipulated in Clause 3, Article 1 of Decree No. 77/2000/NĐ-CP dated December 15, 2000 of the Government include: persons receiving pensions (including civil servant, public employee, and military pensions); persons receiving disability benefits (excluding those receiving fixed-rate benefits under Decision No. 91/2000/QĐ-TTg dated August 4, 2000 of the Prime Minister); rubber plantation workers' benefits; sickness, maternity, work injury, occupational disease, and death benefits; village and ward cadres who have retired and are receiving benefits under Decree No. 09/1998/NĐ-CP dated January 23, 1998 of the Government.

II. CALCULATION METHOD FOR ADJUSTED PENSION LEVELS AND SOCIAL INSURANCE BENEFITS

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

1. Persons currently receiving pensions, disability benefits, rubber plantation workers' benefits, work injury benefits, occupational disease benefits, and monthly survivor's benefits shall have their pension or benefit levels recalculated as follows:

Example 1: Mr. Tran Van N, who retired in October 1996, has a current pension level of VND 550,000 in December 2000 based on Decree No. 175/1999/NĐ-CP dated December 15, 1999. From January 1, 2001, his pension level will be calculated according to Decree No. 77/2000/NĐ-CP dated December 15, 2000 as follows: VND 550,000 x 1.167 = VND 641,850.

In cases where individuals are currently receiving an additional VND 25,000/month benefit under Decision No. 234/QĐ-TTg dated December 22, 1999, this amount will also be included in the calculation of the increased pension level under Decree No. 77/2000/NĐ-CP dated December 15, 2000.

Example 2: Mr. Le Van T, who retired in July 1985, has a current pension level in December 2000 including:

- Pension level calculated according to Decree No. 175/1999/NĐ-CP dated December 15, 1999: VND 350,000

- Additional monthly pension increase according to Decision No. 234/1999/QĐ-TTg dated December 22, 1999: VND 25,000

- Total current pension level in December 2000: VND 350,000 + VND 25,000 = VND 375,000

- Starting from January 1, 2001, the pension level will be calculated according to Decree No. 77/2000/NĐ-CP as follows:

VND 375,000 x 1.167 = VND 437,625.

2. Persons who start receiving pensions or social insurance benefits from January 1, 2001 onwards shall be calculated as follows:

a. Retirees with social insurance contributions made at salary levels specified in the state-defined salary scale shall have their average monthly salary for calculating the pension base adjusted according to the minimum wage level of VND 210,000/month as stipulated in Decree No. 77/2000/NĐ-CP dated December 15, 2000.

Example 3: A cadre retiring in February 2001 had the following salary contributions for the last five years before retirement:

- From February 1996 to January 1999, salary coefficient 3.63

- From February 1999 to January 2001, salary coefficient 3.91

The method for calculating the average monthly salary for social insurance contributions to determine the pension base is as follows:

- From December 1996 to January 1999, total salary calculated according to the coefficient:

3.63 x VND 210,000 x 36 months = VND 27,442,800

- From February 1999 to January 2001, total salary according to the coefficient:

3.91 x VND 210,000 x 24 months = VND 19,706,400

- Total salary contributions for the last five years before retirement:

VND 27,442,800 + VND 19,706,400 = VND 47,149,200

- Average monthly salary for social insurance contributions to determine the pension base:

VND 47,149,200 ÷ 60 months = VND 785,820

b. For retirees who have contributed to social insurance both at salary levels specified in the state-defined salary scale and at non-state-defined salary levels, the average monthly salary for the last five years in the state sector shall be calculated according to the minimum wage level of VND 210,000/month for the period of contributions at state-defined salary levels.

c. For village and ward cadres who have retired and are receiving benefits under Article 4 of Decree No. 09/1998/NĐ-CP dated January 23, 1998 of the Government, the benefit level shall be calculated based on the adjusted living allowance corresponding to the increase in the minimum wage level of VND 210,000/month as guided in Joint Circular No. 72/2000/TTLT-BTCCBCP-BTC dated December 26, 2000 of the Joint Office of the Government Civil Service Organization Committee and the Ministry of Finance.

d. For persons receiving sickness, maternity, work injury, occupational disease, and survivor's benefits, or one-time social insurance benefits, the benefit level shall be calculated based on the salary or living allowance level according to the minimum wage level of VND 210,000/month.

Specifically, for individuals who suffered work injuries or occupational diseases before January 1, 2001, or who retired and received one-time benefits, sickness benefits, or maternity benefits before January 1, 2001 but still have entitlement periods remaining after January 1, 2001, or are newly entitled to benefits after that date, the calculation shall be as follows:

- For individuals who were treated and discharged from hospital before January 1, 2001, the one-time or monthly benefits for the period prior to January 1, 2001 shall be paid according to the December 2000 benefit level. If treatment began before January 1, 2001 and discharge occurred on or after January 1, 2001, the benefits shall be calculated and paid according to the minimum wage level of VND 210,000/month.

- For individuals who ceased work to receive sickness benefit or maternity benefit before January 1, 2001 but still had remaining entitlements for such benefits after January 1, 2001, the benefit amount from January 1, 2001 onwards shall be calculated based on the minimum wage of 210,000 VND/month.

- For individuals who died before January 1, 2001 but funeral expenses and one-time allowance had not yet been paid, such payments shall still be made at the rate of the monthly allowance in December 2000.

- For individuals who ceased work to receive one-time social insurance benefit before January 1, 2001 but received a decision for such benefit from the social insurance agency starting from January 1, 2001, the benefit amount shall be calculated based on the minimum wage of 210,000 VND/month.

e. For retired military personnel and police officers who are entitled to additional allowances under Decision No. 812/TTg dated December 12, 1995, the additional allowance from January 1, 2001 onwards shall be calculated based on the minimum wage of 210,000 VND/month.

f. For retired individuals living alone who are entitled to benefits under Article 2 of Decision No. 812/TTg dated December 12, 1995 issued by the Prime Minister, from January 1, 2001 onwards, the benefit amount shall be adjusted to 315,000 VND/month.

g. The regional allowance (if applicable) for retired individuals and those receiving social insurance benefits shall be calculated based on the minimum wage of 210,000 VND/month from January 1, 2001.

III/ IMPLEMENTATION

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

2. The Ministry of Finance shall review and disburse the pension fund and additional allowances for beneficiaries of social insurance funded by 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 funds that must be covered by the State budget, to be submitted to the Ministry of Finance for approval, and concurrently sent to the Ministry of Labor, Invalids and Social Affairs by February 2001.

b. Adjust and pay the increased amounts to beneficiaries of pensions and social insurance benefits, including those covered by the State budget and those covered by the social insurance fund. Implement social insurance contributions based on the adjusted minimum wage according to Decree No. 77/2000/NĐ-CP dated December 15, 2000 issued by the Government.

4. Ministries and sectors at the central level, People's Committees of provinces and centrally-administered cities shall direct agencies, units, Departments of Labor, 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, 2001.

Any issues arising during implementation should be reported to the Joint Ministry of Labor, Invalids and Social Affairs - Ministry of Finance for study and resolution.