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

JOINT CIRCULAR

Guidelines for implementing adjustments to pension levels and social insurance benefits pursuant to Decree No. 77/2000/NĐ-CP dated December 15, 2000 of the Government

______________________

Pursuant to Clause 3, Article 1 of Decree No. 77/2000/NĐ-CP dated December 15, 2000 of the Government regarding the adjustment of the minimum wage level, benefit levels, and living expenses for individuals receiving wages, allowances, and living expenses, after reaching consensus with the Central Organization Committee, the Government Civil Service Organization Board, and the Joint Circular of the Ministry of Labor, Invalids and Social Affairs and the Ministry of Finance, we hereby provide guidelines for implementing the adjustment of pensions and social insurance benefits as follows:

I. APPLICABLE SUBJECTS

The subjects eligible for the adjustment of pensions 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 official, and employee pensions, military pensions, and police pensions); 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 worker benefits; sick leave, 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/ METHODS FOR CALCULATING PENSION LEVELS AND SOCIAL INSURANCE BENEFITS

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

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

Example 1Example: 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 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 additional benefits of VND 25,000 per month 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 2Example: 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 increase to the monthly pension 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. Individuals who start receiving pensions or social insurance benefits from January 1, 2001 onwards shall be calculated as follows:

a. Retirees with a period of social insurance contributions based on salary scales set by the State shall calculate the average salary for pension purposes using the adjusted salary scales according to the minimum wage of VND 210,000 per month as stipulated in Decree No. 77/2000/NĐ-CP dated December 15, 2000.

Example 3Example: A civil servant retiring in February 2001 had the following salary contribution history 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

Calculation of the average salary for pension purposes 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 salary for pension purposes: VND 47,149,200 ÷ 60 months = VND 785,820

b. Retirees who have contributed to social insurance both under the salary scales set by the State and outside these scales shall calculate the average salary for pension purposes for the last five years within the State sector based on the minimum wage of VND 210,000 per month for the period of contributions under the salary scales set by the State.

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 to VND 210,000 per month as guided in Joint Circular No. 72/2000/TTLT-BTCCBCP-BTC dated December 26, 2000 of the Joint Circular of the Government Civil Service Organization Board and the Ministry of Finance.

d. Individuals receiving sickness, maternity, work injury, occupational disease, survivor, or one-time social insurance benefits shall have their benefit levels calculated based on the minimum wage of VND 210,000 per month.

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

- For individuals who suffered work injuries or occupational diseases and were treated and discharged before January 1, 2001, the one-time or monthly benefits for the period before January 1, 2001 shall be paid at 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 based on the minimum wage of VND 210,000 per 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 December 2000 allowance.

- 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 individuals who retired or ceased work due to loss of working capacity, being military personnel or public security officers entitled to additional allowances as stipulated in Decision No. 812/TTg dated December 12, 1995, the additional allowance from January 1, 2001 shall be calculated based on the minimum wage of 210,000 VND/month.

f. For individuals receiving pension living alone, entitled to benefits under Article 2 of Decision No. 812/TTg dated December 12, 1995 of the Government, from January 1, 2001, the adjustment shall be 315,000 VND/month.

g. The regional subsidy (if applicable) for individuals receiving pensions or 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, War Invalids and Social Affairs shall coordinate with the Ministry of Finance to provide guidance, inspect, and resolve 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 review, and concurrently sent to the Ministry of Labor, War Invalids and Social Affairs by February 2001.

b. Adjust and pay the increased amounts to beneficiaries of pensions and social insurance benefits, including those funded by the State budget and those funded 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 of 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, 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, 2001.

During the implementation period, if there are any difficulties, please reflect them to the Joint Ministry of Labor, War Invalids and Social Affairs - Ministry of Finance for study and resolution./.