Circular No. 05/2007/TT-BLDTBXH guides the calculation of retirement pension levels for civil servants and officials of the customs sector retiring according to Decision No. 287/2006/QD-TTg dated December 27, 2006 of the Government Prime Minister.

CIRCULAR

Guidelines for calculating retirement pension levels for civil servants and officials of the customs sectorupon retirement

as stipulated in Decision No. 287/2006/QĐ-TTg dated December 27, 2006of the Prime Minister

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Pursuant to Decision No. 287/2006/QĐ-TTg dated December 27, 2006 of the Prime Minister regarding the settlement of seniority allowances for civil servants and officials of the Customs sector upon retirement, the Ministry of Labor - Invalids and Social Affairs guides the implementation as follows:

I. APPLICABLE OBJECTS

1. Civil servants and officials of the Customs sector who retire during the period from April 1, 1993 to November 30, 2007, with time served in the Customs sector before December 1, 2002 not yet fully counted towards the seniority allowance for the Customs sector as prescribed in Decree No. 96/2002/NĐ-CP dated November 19, 2002 of the Government, to calculate the average monthly salary for the last five years before retirement for social insurance contributions.

2. Civil servants and officials of the Customs sector who retired before December 1, 2002 and received retirement benefits according to Decree No. 236/HĐBT dated September 18, 1985 of the Council of Ministers (now the Government), who have already been granted the seniority allowance for the Customs sector included in their salary to calculate the monthly retirement pension, are not subject to this Circular.

II. METHOD OF CALCULATING RETIREMENT PENSION LEVELS

The retirement pension level for the subjects specified in Clause 1, Section I of this Circular shall be calculated based on the average monthly salary for the last five years before retirement, including the seniority allowance for the Customs sector, as follows:

1. Calculating the retirement pension at the time of retirement supplemented with seniority allowance.

If the retirement pension at the time of retirement was calculated based on the average monthly salary for the last five years before retirement without fully counting the seniority allowance for the Customs sector, it will now be supplemented with the monthly seniority allowance according to Clause 7, Article 3 of Decree No. 96/2002/NĐ-CP dated November 19, 2002 of the Government.

The supplementary seniority allowance is calculated based on the number of years worked in the Customs sector and the monthly salary received and contributed to social insurance in the last five years recorded in each person's retirement file.

2. Adjusting the retirement pension based on the retirement pension at the time of retirement supplemented with seniority allowance.

The retirement pension at the time of retirement, which has been calculated according to Clause 1 above, will be adjusted according to regulations in documents adjusting pensions over different periods depending on the retirement date, as follows:

- Decree No. 06/CP dated January 21, 1997 of the Government on the settlement of salaries and subsidies for 1997 for civil servants, administrative officials, retirees, those who lost their ability to work, military personnel, village and ward cadres, and certain groups receiving social welfare policies;

- Decree No. 175/1999/NĐ-CP dated December 15, 1999 of the Government on the adjustment of the minimum wage, subsidies, and living expenses for those receiving salaries, allowances, subsidies, and living expenses from state budget funds;

- Decree No. 77/2000/NĐ-CP dated December 15, 2000 of the Government on the adjustment of the minimum wage, subsidies, and living expenses for those receiving salaries, allowances, subsidies, and living expenses;

- Decree No. 03/2003/NĐ-CP dated January 15, 2003 of the Government on the adjustment of salaries, social subsidies, and the reform of the salary management mechanism;

- Decree No. 208/2004/NĐ-CP dated December 14, 2004 of the Government on the adjustment of pensions and social insurance subsidies;

- Decree No. 117/2005/NĐ-CP dated September 15, 2005 of the Government on the adjustment of pensions and social insurance subsidies;

- Decree No. 118/2005/NĐ-CP dated September 15, 2005 of the Government on the adjustment of the general minimum wage;

- Decree No. 93/2006/NĐ-CP dated September 7, 2006 of the Government on the adjustment of pensions, social insurance subsidies, and monthly subsidies for village cadres who have retired;

- Decree No. 94/2006/NĐ-CP dated September 7, 2006 of the Government on the adjustment of the general minimum wage.

Example:

Mr. Nguyen Van A, a Senior Customs Inspector who retired on January 1, 1999, with 40 years of service in the Customs sector, the salary progression in the last five years without enjoying the seniority allowance for the Customs sector is as follows:

- From January 1, 1994 to December 31, 1995: receiving a salary coefficient of 4.85

- From January 1, 1996 to December 31, 1998: receiving a salary coefficient of 5.13

Mr. A's retirement pension will be adjusted as follows:

a) Calculating the retirement pension at the time of retirement supplemented with seniority allowance.

The retirement salary at the time of January 1999 is calculated based on the minimum wage of 144,000 VND/month.

The recalculated average monthly salary for the last five years before retirement, including the seniority allowance for the Customs sector of Mr. A, is as follows:

- Total monthly salary for social insurance contributions from January 1, 1994 to December 31, 1994 (12 months) supplemented with the seniority allowance for the Customs sector:

4.85 x 144,000 VND x 1.36 x 12 months = 11,397,888 VND

- Total monthly salary for social insurance contributions from January 1, 1995 to December 31, 1995 (12 months) supplemented with the seniority allowance for the Customs sector:

4.85 x 144,000 VND x 1.37 x 12 months = 11,481,696 VND

- Total monthly salary for social insurance contributions from January 1, 1996 to December 31, 1996 (12 months) supplemented with the seniority allowance for the Customs sector:

5.13 x 144,000 VND x 1.38 x 12 months = 12,233,203 VND

- Total monthly salary for social insurance contributions from January 1, 1997 to December 31, 1997 (12 months) supplemented with the seniority allowance for the Customs sector:

5.13 x 144,000 VND x 1.39 x 12 months = 12,321,850 VND

- Total monthly salary for social insurance contributions from January 1, 1998 to December 31, 1998 (12 months) supplemented with the seniority allowance for the Customs sector:

5.13 x 144,000 VND x 1.40 x 12 months = 12,410,496 VND

The total monthly salary for the last 60 months is: 11,397,888 VND + 11,481,696 VND + 12,233,203 VND + 12,321,850 VND + 12,410,496 VND = 59,845,133 VND.

The recalculated average monthly salary for social insurance contributions, including the seniority allowance for the Customs sector of Mr. A, is:

59,845,133 VND ÷ 60 months = 997,419 VND/month

The retirement pension of Mr. A at the time of retirement on January 1, 1999, was supplemented with seniority allowance as follows:

997,419 VND/month x 75% = 748,064 VND/month

b) Adjust the level of retirement pension based on the retirement pension at the time of retirement which has been calculated with the additional seniority allowance.

The retirement pension of Mr. A at the time of retirement on January 1, 1999, which has been calculated with the additional seniority allowance, shall be adjusted as follows:

- From January 1, 2000, the retirement pension shall be adjusted to increase by 25% according to the provisions of Government Decree No. 175/1999/NĐ-CP dated December 15, 1999;

- From January 1, 2001, the retirement pension shall be adjusted to increase by 16.7% according to the provisions of Government Decree No. 77/2000/NĐ-CP dated December 15, 2000;

- From January 1, 2003, the retirement pension shall be adjusted to increase by 38.1% according to the provisions of Government Decree No. 03/2003/NĐ-CP dated January 15, 2003;

- From October 1, 2004, the retirement pension shall be adjusted to increase by 10% according to the provisions of Government Decree No. 208/2004/NĐ-CP dated December 14, 2004;

- From October 1, 2005, the retirement pension shall be adjusted to increase by 8% according to the provisions of Government Decree No. 117/2005/NĐ-CP dated September 15, 2005, and increased by 20.7% according to the provisions of Government Decree No. 118/2005/NĐ-CP dated September 15, 2005;

- From October 1, 2006, the retirement pension shall be adjusted to increase by 8% according to the provisions of Government Decree No. 93/2006/NĐ-CP dated September 7, 2006, and increased by 28.6% according to the provisions of Government Decree No. 94/2006/NĐ-CP dated September 7, 2006;

The monthly retirement pension that Mr. A receives from January 1, 2007, is:

748,064 VND/month x 1.25 x 1.167 x 1.381 x 1.1 x 1.08 x 1.207 x 1.08 x 1.286 = 3,001,247 VND/month.

III. IMPLEMENTATION

1. The Vietnam Social Security is responsible for implementing the calculation and payment of the monthly retirement pension for civil servants and officials of the Customs sector retiring in accordance with Decision No. 287/2006/QĐ-TTg dated December 27, 2006, of the Prime Minister and this Circular, specifically:

a) Implement the calculation and payment of the retirement pension for civil servants and officials of the Customs sector who have retired without having their seniority allowance for the Customs sector added;

b) Guide and inspect the social security system in organizing and implementing in accordance with the guidance provided in this Circular.

2. The General Department of Customs is responsible for compiling a list of individuals who have retired and had their seniority allowance for the Customs sector added, and send it to the Vietnam Social Security; guide customs offices in provinces and cities to provide files to the provincial and municipal social security offices regarding cases with issues related to seniority.

3. The method of calculating the seniority allowance for the Customs sector (including those who have already received a seniority allowance for the military, police, and state communications services before transferring to the Customs sector) shall be implemented in accordance with Clause 4 of Circular No. 40/2003/TT-BTC dated May 5, 2003, issued by the Ministry of Finance, guiding the implementation of the seniority allowance system for the Customs sector.

4. This Circular takes effect 15 days after its publication in the Official Gazette; the retirement pension calculated in accordance with this Circular shall apply from January 1, 2007.

5. In the course of implementation, if there are any difficulties, please report to the Ministry of Labor, Invalids, and Social Affairs for timely supplementary guidance./.