Circular No. 11/2005/TT-BLDTBXH guiding the adjustment of pension and social insurance benefits according to Government Decree No. 208/2004/NĐ-CP dated December 14, 2004.

 CIRCULAR

Guidelines for adjusting pensions and social insurance benefits in accordance with

Decree No. 208/2004/NĐ-CP dated December 14, 2004 of the Government

Implementing Decree No. 208/2004/NĐ-CP dated December 14, 2004 of the Government on the adjustment of pensions and social insurance benefits; After receiving opinions from the Ministry of National Defense, the Ministry of Public Security, the Ministry of Finance, the Ministry of Home Affairs, and the Vietnam General Confederation of Labor, the Ministry of Labor, Invalids, and Social Affairs provides guidelines for adjusting pensions and social insurance benefits as follows:

I. APPLICABLE OBJECTS

1. Officials, civil servants, workers, employees, members of armed forces, and individuals working in confidential services who receive monthly pensions according to the salary scale and table prescribed by the State;

2. Workers and employees who receive monthly pensions and have both periods of time earning salaries according to the salary scale and table prescribed by the State and periods of time earning salaries not according to the salary scale and table prescribed by the State;

3. Workers and employees currently receiving monthly disability allowances, including those receiving monthly allowances under Decision No. 91/2000/QĐ-TTg dated August 4, 2000 of the Prime Minister;

4. Rubber plantation workers currently receiving monthly allowances;

5. Village, ward, and town officials currently receiving monthly allowances under Decree No. 09/1998/NĐ-CP dated January 23, 1998 and Decree No. 121/2003/NĐ-CP dated October 21, 2003 of the Government.

II. ADJUSTMENT OF PENSIONS AND SOCIAL INSURANCE BENEFITS

1. Adjusting pensions and social insurance benefits for individuals receiving pensions and social insurance benefits monthly (excluding work injury allowances, occupational disease allowances, and monthly survivor allowances) before October 1, 2004, in accordance with Article 2 of Decree No. 208/2004/NĐ-CP as follows:

Example 1: Mr. Nguyen Van A has a pension of 1,200,000 VND per month in September 2004. His pension from October 2004 to September 2005 will be adjusted as follows:

1,200,000 VND/month x 1.10 = 1,320,000 VND/month

Example 2: Mr. Nguyen Van B, rank Major, has a pension of 830,000 VND per month in September 2004. His pension from October 2004 to September 2005 will be adjusted as follows:

830,000 VND/month x 1.10 = 913,000 VND/month

Example 3: Mr. Nguyen Van C receives a disability allowance of 350,000 VND per month in September 2004. His disability allowance from October 2004 to September 2005 will be adjusted as follows:

350,000 VND/month x 1.10 = 385,000 VND/month

Example 4: Ms. Tran Thi D receives a monthly allowance under Decision No. 91/2000/QĐ-TTg with an allowance of 138,000 VND per month in September 2004. Her allowance from October 2004 to September 2005 will be adjusted as follows:

138,000 VND/month x 1.10 = 151,800 VND/month

Example 5: Mr. Vu Van E is a village official who retired and receives a monthly allowance under Decree No. 09/1998/NĐ-CP dated January 23, 1998 of the Government, with an allowance of 270,000 VND per month in September 2004. His allowance from October 2004 to September 2005 will be adjusted as follows:

270,000 VND/month x 1.10 = 297,000 VND/month

2. Adjusting pensions for individuals retiring from October 1, 2004 to September 30, 2005, in accordance with Article 3 of Decree No. 208/2004/NĐ-CP as follows:

a. The average monthly salary used as the basis for social insurance contributions in the last five years before retirement, as stipulated in Clause 1 of Article 3 of Decree No. 208/2004/NĐ-CP, shall be calculated as follows:

Where:

* Total monthly salary used as the basis for social insurance contributions according to the old and new salary coefficients before retirement: Is the total monthly salary calculated based on the salary received before retirement according to the provisions at points a and b of Clause 1 of Article 3 of Decree No. 208/2004/NĐ-CP.

b. The pension for individuals retiring from October 1, 2004 to September 30, 2005, as stipulated in Clause 2 of Article 3 of Decree No. 208/2004/NĐ-CP, shall be calculated as follows:

Where:

* Unadjusted pension amount: Is the pension amount at the month of retirement before adjustment, calculated as follows:

* The pension adjustment corresponding to the month of retirement from October 1, 2004 to September 30, 2005 is determined according to Table 1 below:

Table 1

Based on the row and column corresponding to the month of retirement in Table 1, determine the cell with the pension adjustment for each individual.

Example 6: Mr. Nguyen Van H has 30 years of social insurance contributions, retired in March 2005, with the following salary contribution history in the last five years before retirement:

- From March 2000 to August 2002 (30 months) with the old salary coefficient of 3.06;

- From September 2002 to September 2004 (25 months) with the old salary coefficient of 3.31;

- From October 2004 to February 2005 (5 months) with the new salary coefficient of 4.32.

Calculation of the average monthly salary for the last five years of social insurance contributions for Mr. H as follows:

- From March 2000 to August 2002:

290,000 VND x 3.06 x 30 months = 26,622,000 VND

- From September 2002 to September 2004:

290,000 VND x 3.31 x 25 months = 23,997,500 VND

- From October 2004 to February 2005:

290,000 VND x 4.32 x 5 months = 6,264,000 VND

- Total monthly salary used as the basis for social insurance contributions in the last five years of Mr. H is: 26,622,000 + 23,997,500 + 6,264,000 = 56,883,500 VND

- Average monthly salary used as the basis for social insurance contributions:

56,883,500 VND ÷ 60 months = 948,058 VND/month

- Unadjusted pension amount of Mr. H is:

75% x 948,058 VND/month = 711,044 VND/month

- Mr. Nguyen Van H retired in March 2005. Therefore, the pension adjustment applicable to Mr. H is 7.5%. Mr. H will receive his pension from March 2005 as follows:

711,044 VND/month + (711,044 VND/month x 7.5%) =

711,044 VND/month + 53,328 VND/month = 764,372 VND/month

Example 7: Comrade Nguyen Van K joined the military in February 1973, rank Lieutenant Colonel, retired and received a pension from December 2004, with the following social insurance contribution history in the last five years as follows:

- From December 1999 to August 2003 (45 months), he was a Major with the first salary increase at the old coefficient of 5.05; seniority allowance 30%.

- From September 2003 to September 2004 (13 months), he was a Major with the second salary increase at the old coefficient of 5.30; seniority allowance 31%.

- From October 2004 to November 2004 (02 months), he was a Major with a new salary coefficient of 6.80; seniority allowance 31%.

The calculation of the average monthly salary for social insurance contributions in the last five years of Comrade K is as follows:

- From December 1999 to August 2003:

290,000 VND x 5.05 x 1.30 x 45 months = 85,673,250 VND

- From September 2003 to September 2004:

290,000 VND x 5.30 x 1.31 x 13 months = 26,175,110 VND

- From October 2004 to November 2004:

290,000 VND x 6.80 x 1.31 x 2 months = 5,166,640 VND

- The total amount of monthly salary serving as the basis for social insurance contributions in the last five years of Comrade K is: 85,673,250 VND + 26,175,110 VND + 5,166,640 VND = 117,015,000 VND

- The average monthly salary for social insurance contributions:

117,015,000 VND ÷ 60 months = 1,950,250 VND/month

- The unadjusted pension level of Comrade K is:

75% x 1,950,250 VND/month = 1,462,687 VND/month

- Comrade K retired from December 2004. Therefore, the pension adjustment rate applicable to Comrade K is 9%. Comrade K received his pension from December 2004 as follows:

1,462,687 VND/month + (1,462,687 VND/month x 9%) =

1,462,687 VND/month + 131,642 VND/month = 1,594,329 VND/month

Example 8: Comrade Bui Viet N joined the People's Public Security in October 1996, was a Senior Colonel, and began receiving retirement pay from February 2005 (38 years and 4 months of social insurance contributions). The development of the monthly salary for social insurance contributions in the last five years before retirement is as follows:

- From February 2000 to July 2000 (06 months), he was a Major with the old salary coefficient of 4.8; seniority allowance 33%.

- From August 2000 to October 2003 (39 months), he was a Lieutenant Colonel with the old salary coefficient of 5.3; seniority allowance 37%.

- From November 2003 to September 2004 (11 months), he was a Senior Colonel with the old salary coefficient of 5.9; seniority allowance 37%.

- From October 2004 to January 2005 (04 months), he was a Senior Colonel with a new salary coefficient of 7.3; seniority allowance 38%.

The calculation of the average monthly salary for social insurance contributions in the last five years is as follows:

- From February 2000 to July 2000:

290,000 VND x 4.8 x 1.33 x 6 months = 11,108,160 VND

- From August 2000 to October 2003:

290,000 VND x 5.3 x 1.37 x 39 months = 82,121,910 VND

- From November 2003 to September 2004:

290,000 VND x 5.9 x 1.37 x 11 months = 25,784,770 VND

- From October 2004 to January 2005:

290,000 VND x 7.3 x 1.38 x 4 months = 11,685,840 VND

- The total amount of monthly salary serving as the basis for social insurance contributions in the last five years of Comrade N is:

11,108,160 VND + 82,121,910 VND + 25,784,770 VND + 11,685,840 VND = 130,700,400 VND

- The average monthly salary for social insurance contributions is:

130,700,400 VND ÷ 60 months = 2,178,340 VND/month

- The unadjusted pension level of Comrade N is:

75% x 2,178,340 VND/month = 1,633,755 VND/month

- Comrade N retired from February 2005. Therefore, the pension adjustment rate applicable to Comrade N is 8%. Comrade N received his pension from February 2005 as follows:

1,633,755 VND/month + (1,633,755 VND/month x 8%) = 1,633,755 VND/month + 130,700 VND/month = 1,764,455 VND/month

3. Adjustment of pensions for those who, prior to retirement, had both periods of earning salaries according to the state-prescribed salary scales and periods of earning salaries not according to the state-prescribed salary scales, in accordance with Article 4 of Decree No. 208/2004/ND-CP, shall only be adjusted for the portion of the pension calculated based on salaries according to the state-prescribed salary scales as follows:

Where:

a. The portion of the pension calculated based on salaries according to the state-prescribed salary scales is calculated as follows:

b. The pension adjustment level:

- For those retiring before October 1, 2004, the adjustment rate is 10%;

- For those retiring during the period from October 1, 2004 to September 30, 2005, it is applied as follows:

+ An adjustment rate of 10% for those who participated in social insurance according to the state-prescribed salary scales before October 2004.

+ The adjustment rate is applied according to the provisions in Table 2 for those who switched from earning salaries according to the state-prescribed salary scales to earning salaries not according to the state-prescribed salary scales during the period from October 1, 2004 to September 30, 2005

1. This Circular takes effect from February 20, 2023; the provisions of this Circular shall apply from January 1, 2023.

c. The pension adjustment coefficient corresponding to the percentage increase in the minimum wage through various stages (if applicable) is the combined pension adjustment rate determined by the product of the percentage increases in the minimum wage set by the State from the time of retirement to this pension adjustment and is specified in Table 3 below:

Table 3:

d. The portion of the pension calculated based on salaries not according to the state-prescribed salary scales is calculated as follows:

Example 9: Mr. Le Van M worked in the state sector for 26 years, then transferred to work in a Joint Venture Enterprise for 4 years, with the average monthly salary for social insurance contributions in the last five years in the state sector being 600,000 VND; the total salary serving as the basis for social insurance contributions in the Joint Venture Enterprise is 180,000,000 VND; Mr. M retired in August 2000, with the percentage of pension received being 75%.

Mr. M retired in August 2000, so his pension adjustment rate is 10%, corresponding to the part of the pension calculated based on the state-prescribed salary scale and has a pension adjustment coefficient determined according to Table 3 (based on row 3 and column 4) of 1.612. Mr. M's pension from October 2004 is as follows:

 

= 628,680 VND/month x 110% + 604,500 VND/month

= 691,548 VND/month + 604,500 VND/month

= 1,296,048 VND/month

Example 10: Mr. Nguyen Van L worked in the state sector for 29 years and 5 months, with an average monthly social insurance salary for the last 5 years in the state sector being 900,000 VND. In December 2004, Mr. L moved to work at a joint venture enterprise where he received a salary of 4,000,000 VND/month. On July 1, 2005, Mr. L retired with a pension rate of 75%.

In December 2004, Mr. L transferred to work at a joint venture enterprise. Based on Table 2, Mr. L's pension adjustment rate is 9%, corresponding to the part of the pension calculated based on the state-prescribed salary scale and has a pension adjustment coefficient determined according to Table 3 (based on row 5 and column 4) of 1.000. Mr. L's pension from July 2005 is as follows:

 

= 661,875 VND/month x 109% + 58,333 VND/month

= 721,444 VND/month + 58,333 VND/month

= 779,777 VND/month

4. Adjustment of pensions for those waiting to retire and receive retirement benefits according to Article 5 of Decree No. 208/2004/NĐ-CP shall be implemented as follows:

Where:

* The pension amount in the month when the retirement conditions are met: is the adjusted pension amount of the person waiting to retire;

* The pension amount in the month when the retirement conditions are met but not yet adjusted: is the pension amount recorded in the Retirement Decision established at the time of leaving the job;

* Pension adjustment rate:

- For those who were waiting to retire before October 1, 2004 and reached the retirement age within the period from October 1, 2004 to September 30, 2005: The adjustment rate is 10%;

- For those who were waiting to retire after October 1, 2004 and reached the retirement age within the period from October 1, 2004 to September 30, 2005: The pension adjustment rate applicable during the waiting period for retirement is applied as specified in Table 1 of this Circular.

Example 11: Mr. Nguyen Van P has contributed to social insurance for 25 years. In August 2004, Mr. P stopped working to wait until he was old enough to receive retirement benefits. In February 2005, Mr. P reached the age to receive retirement benefits. The development of the social insurance salary contributions in the last 60 months before stopping work to wait for retirement benefits of Mr. P is as follows:

- 24 months of social insurance contributions at the old salary coefficient of 3.06

- 36 months of social insurance contributions at the old salary coefficient of 3.31.

- The pension rate that Mr. P will receive is 65%

The pension amount of Mr. P in February 2005 before adjustment will be:

= 605,685 VND/month

- Mr. P stopped working in August 2004 to wait until he was old enough to receive retirement benefits, so Mr. P falls under the category subject to a pension adjustment rate of 10%. Mr. P's pension from February 2005 to September 2005 is as follows:

605,085 VND/month + (605,085 VND/month x 10%) =

605,085 VND/month + 60,509 VND/month = 665,594 VND/month.

Example 12: Comrade Nguyen Van Q, a Professional Military Officer, Medical Corps, has the following social insurance contribution history:

- From March 1974 to September 1982 as a medical officer at a provincial hospital.

- Joined the military in October 1982. In March 2001, Comrade Q submitted a request to stop working to wait until he was old enough to receive retirement benefits. In July 2005, Comrade Q reached the age to receive retirement benefits. Comrade Q's total social insurance contribution period is 27 years and 1 month.

The development of the social insurance salary contributions in the last 5 years before stopping work to wait for retirement benefits of Comrade Q is as follows:

- From April 1996 to July 1998 (28 months), the old salary coefficient was 4.15, with a seniority allowance of 15%;

- From August 1998 to March 2001 (32 months), the old salary coefficient was 4.40, with a seniority allowance of 18%.

- The pension rate that Comrade Q will receive is 69%

- The pension amount of Comrade Q in July 2005 before adjustment will be:

= (69% x 1,049,209 VND/month) x 1.381 = 999,780 VND/month

- Comrade Q's pension from July 2005 to September 2005 is as follows:

999,780 VND/month + (999,780 VND/month x 10%) =

999,780 VND/month + 99,978 VND/month = 1,099,758 VND/month

5. For individuals who continue to pay social insurance contributions to receive social insurance benefits according to point d, Clause 3, Article 3 of Decree No. 41/2002/NĐ-CP and Clause 2, Article 5 of Decree No. 121/2003/NĐ-CP, the pension adjustment is regulated as follows:

a. Workers who stopped working before October 2004 and continued to pay social insurance contributions at the old salary coefficient, the pension adjustment for these individuals shall be carried out as for those receiving pensions before October 2004 as stipulated in Point 1, Section II of this Circular.

b. Workers who stopped working between October 2004 and September 2005, if they belong to the group eligible for new salary classification and continue to pay social insurance contributions at the new salary level, the pension adjustment for these individuals shall be carried out as stipulated in Point 2, Section II of this Circular.

6. For individuals whose social insurance contribution periods are preserved, then meet the conditions to receive retirement benefits or only receive a one-time social insurance benefit when not meeting the conditions for retirement benefits, the implementation is as follows:

a. For individuals whose social insurance contribution periods were preserved before October 1, 2004:

- The pension amount is implemented as for those receiving pensions before October 2004 as stipulated in Point 1 or Point 3, Section II of this Circular;

- The one-time social insurance allowance is calculated based on the average monthly wage used as the basis for social insurance contributions according to the wage levels specified in paragraph a, Clause 1, Article 3 of Decree No. 208/2004/NĐ-CP and as provided in the guiding documents of the Inter-Ministerial Joint Circulars regarding adjustments to pension levels according to the minimum wage increase rates over various periods.

b. For individuals who are eligible for retention of social insurance contribution periods after October 1, 2004, and whose social insurance benefits were resolved before October 2005:

- The pension level shall be implemented as for those receiving pensions during the period from October 1, 2004 to September 30, 2005, as stipulated in Point 2 or Point 3, Section II of this Circular;

- The one-time social insurance allowance is calculated based on the average monthly wage used as the basis for social insurance contributions as specified in paragraph a, Point 2, Section II of this Circular.

7. For individuals with a Decision to receive a one-time social insurance allowance or a one-time survivor's benefit issued before October 1, 2004, but received after October 1, 2004, the average monthly wage used as the basis for social insurance contributions shall be calculated according to the wage levels specified in paragraph a, Clause 1, Article 3 of Decree No. 208/2004/NĐ-CP.

III. IMPLEMENTATION

1. The Ministry of Labor, Invalids and Social Affairs shall coordinate with the Ministry of Finance, the Ministry of National Defense, the Ministry of Public Security, and relevant organizations to guide, inspect the implementation, and resolve issues within their respective management responsibilities in accordance with Decree No. 208/2004/NĐ-CP of the Government and the guidance provided in this Circular.

2. Provincial People's Committees directly under the Central Government shall be responsible for directing the Department of Labor, Invalids and Social Affairs and relevant agencies to inspect and urge the implementation of the guidance provided in this Circular.

3. The Vietnam Social Security shall be responsible for implementing the adjustment of pensions and social insurance allowances as prescribed in Decree No. 208/2004/NĐ-CP of the Government and the guidance provided in this Circular, specifically:

- Implementing the adjustment of pensions and social insurance allowances and organizing timely, full, and correct payments for those receiving pensions and social insurance allowances before October 1, 2004;

- Calculating pensions and social insurance allowances for those receiving pensions and social insurance allowances from October 1, 2004 to September 30, 2005;

- Collecting social insurance contributions correctly and fully according to the new salary system and refunding the difference in pension and social insurance allowances for those who have been receiving pensions and social insurance allowances since October 1, 2004 but have not yet been adjusted according to the guidance provided in this Circular;

- Coordinating the dissemination and explanation to retirees and workers in accordance with Decree No. 208/2004/NĐ-CP and the guidance provided in this Circular;

- Directing, urging, and inspecting the Social Security system to implement according to the guidance provided in this Circular; directing and guiding the Social Security under the Ministry of National Defense and the Ministry of Public Security to implement policies for those receiving pensions and social insurance allowances in the armed forces in accordance with regulations;

- Preparing reports attached as an appendix to this Circular and submitting them to the Ministry of Labor, Invalids and Social Affairs.

4. Heads of agencies, Ministries, sectors, mass organizations, Chairmen of Management Councils, General Directors, Directors of Holding Companies, and Companies shall be responsible for directing subordinate units to implement salary adjustments, pension adjustments, and social insurance allowances in accordance with the guidance provided in this Circular and ensuring full and correct social insurance contributions.

5. Additional funds resulting from monthly pension and social insurance allowance adjustments for individuals covered by state budget payments shall be guaranteed by the Ministry of Finance.

6. This Circular shall take effect fifteen days after its publication in the Official Gazette; the provisions regarding pension and social insurance allowance adjustments in this Circular shall apply from October 1, 2004.

Any difficulties encountered during implementation should be reported to the Ministry of Labor, Invalids and Social Affairs for study and resolution.