Joint Circular No. 21-LB/TT provides guidelines for implementing mandatory social insurance benefits.

CIRCULAR

OF THE MINISTRY OF LABOR - INVALIDS AND SOCIAL AFFAIRS - FINANCE

Guidelines for implementing social insurance benefits under mandatory form

Implementing Decree No. 43/CP dated June 22, 1993 of the Government on temporary social insurance benefit regulations; after receiving opinions from the Vietnam General Confederation of Labor and relevant agencies, the Ministry of Labor - Invalids and Social Affairs and the Ministry of Finance jointly issue guidelines for implementing social insurance benefits under mandatory form as follows:

Implementing the Decree No. 43/CP dated June 22, 1993 of the Government providing temporary social insurance benefits; after receiving opinions from the Vietnam General Confederation of Labor and relevant agencies, the Ministry of Labor - Invalids and Social Affairs and the Ministry of Finance jointly issue guidelines for implementing mandatory social insurance benefits as follows:

 

A. APPLICABLE OBJECTS

The subjects mandatorily applying all five social insurance benefits prescribed in Point 1, Article 2 of Decree No. 43-CP dated June 22, 1993 of the Government include:

I. Civil Servants and Administrative Staff

1- Officials elected or appointed to positions in state management agencies, the Party, and mass organizations from central to district levels;

2- Civil servants and administrative staff working in state management agencies and state-affiliated public institutions from central to district levels;

3- Cadres, workers, and staff in Party, mass organization, and association offices from central to district levels;

4- State civil servants and administrative staff seconded to work at communes, wards, associations, projects, and international organizations based in Vietnam.

II. Workers and Staff in Enterprises and Other Organizations

1- Workers and staff employed in state-owned enterprises including business and service organizations under administrative units, public institutions, armed forces, the Party, mass organizations, and associations;

2- Workers and staff in economic public institutions;

3- Workers earning wages or salaries in production, business, and service units belonging to non-state economic sectors employing ten or more workers;

4- Vietnamese workers employed in export processing zones, special economic zones, joint ventures, foreign-invested enterprises, diplomatic missions, representative offices of international organizations, and other organizations of foreigners in Vietnam.

The subjects specified in Part A above also include those sent for study, internship, work, recuperation, both domestically and abroad, etc.

 

B- SOCIAL INSURANCE BENEFITS

I. Sickness Allowance

1. Conditions for Entitlement:

Workers who take leave due to illness, accidents, or risks; female workers with their first or second child (including legally adopted children), or in special cases with their third child according to Decision No. 162-HĐBT dated October 18, 1988 of the Council of Ministers (now the Government) under 72 months old suffering from illness confirmed by medical certificates from their workplace, unit, commune, ward health centers, hospitals, or healthcare facilities under the health sector's management.

In cases where the mother dies, becomes severely disabled, suffers from mental illness, has long-term illness, is on a business trip, or if the parents have divorced (the child lives with the father), the father can take leave and receive sickness insurance allowance to care for the sick child.

For cases of taking leave due to self-inflicted harm, fighting, drunkenness, or drug use, no sickness allowance will be provided.

2. Duration of Leave Entitled to Sickness Allowance Replacing Wages:

a) For those working under normal conditions:

- 30 days within one year, if they have contributed to social insurance for less than 15 years;

- 45 days within one year, if they have contributed to social insurance for 15 years or more.

b) For those working in heavy, hazardous jobs (job categories classified as heavy or hazardous according to state regulations):

- 40 days within one year, if they have contributed to social insurance for less than 15 years;

- 60 days within one year, if they have contributed to social insurance for 15 years or more.

c) Those suffering from diseases requiring long-term hospitalization may receive social insurance allowance for up to 180 days (regardless of the duration of social insurance contributions). In exceptional cases exceeding this period, the patient continues to receive social insurance allowance at 70% of the minimum wage for state civil servants (hereinafter referred to as the minimum wage). The list of diseases requiring long-term treatment is stipulated in Circular No. 33-TT/LB dated June 25, 1987 of the Ministry of Health and the Vietnam General Confederation of Labor.

d) Duration of Leave Due to Child Illness:

- 15 days within one year, for children under 36 months old;

- 12 days within one year, for children aged 36 months to 72 months.

3- Amount of Sickness Allowance:

The sickness allowance replacing wages is 75% of the salary level that the person contributed to social insurance before taking leave.

II. Maternity Allowance

1. Conditions for Entitlement:

Female workers who are pregnant and give birth to their first or second child, and in special cases, their third child, as stipulated in Decision No. 162-HĐBT.

2- Duration of Leave Entitled to Maternity Allowance:

a) During Pregnancy:

- They are entitled to three prenatal check-ups, each lasting one day.

Specifically, those working in mountainous or island areas far from medical facilities, pregnant women with medical conditions, or abnormal pregnancies are entitled to two days for each prenatal check-up.

- They are entitled to 20 days of leave for miscarriage if the pregnancy is less than three months; 30 days if the pregnancy is three months or more.

b) During Delivery:

- Before and after childbirth, they are entitled to 120 days of leave for those working under normal conditions, and 150 days for those working in heavy, hazardous jobs, or in areas with regional allowances of coefficient 0.7 and 1. Among these, the pre-delivery leave is 30 days, and if the leave starts earlier, the total post-delivery leave does not exceed the general limit.

- For multiple births, starting from the second child, the mother receives an additional 30 days of leave for each child.

- If the child dies within 60 days after birth (including stillbirths), the mother is entitled to 75 days of leave from the date of delivery; if the child dies after 60 days, the mother is entitled to 15 days of leave from the date of death, but the total post-delivery leave does not exceed the general limit.

After the post-delivery leave period, if the mother needs it and obtains her employer's consent, she may take additional leave, but this additional leave does not exceed 180 days and is not entitled to maternity insurance allowance.

c) Raising Newly Adopted Infants:

An employee (regardless of gender) who legally adopts a newborn infant in accordance with the provisions of the Law on Marriage and Family shall be entitled to take leave and receive benefits until the child reaches 120 days old.

3- Amount of Sickness Allowance:

During the maternity leave period as stipulated in point 2 above, they shall receive benefits equivalent to 100% of their salary level before taking leave for social insurance contributions.

Additionally, upon giving birth, they will receive a one-time benefit equal to two months' minimum wage.

In cases of multiple births, or if the mother dies after childbirth, or if the mother is ill and medical authorities designate that she cannot breastfeed, or if adopting a newborn infant, they will receive a benefit equal to two months' minimum wage to purchase milk.

III. Benefits for work-related accidents and occupational diseases

1- Benefits for work-related accidents.

a) Conditions for receiving benefits:

- Suffering a work-related accident during working hours at the workplace, including overtime work required by the employer;

- Suffering an accident while on official business;

- Suffering an accident on the way to and from the workplace from their residence;

- Suffering an accident while rescuing people or property of the State or the public.

The procedures for reviewing entitlement to work-related accident benefits are governed by current regulations.

b) Benefits Received:

- During the period of absence from work for treatment until recovery, they shall receive 100% of their pre-accident salary level and medical expenses (as prescribed by the Ministry of Health). These costs shall be borne by the employer.

- Once the injury has stabilized, the injured worker shall be referred by the social insurance organization to a provincial or centrally-administered city Medical Examination Board or a sectoral Medical Examination Board according to the regulations of the Ministry of Health for assessment of their work capacity. Depending on the degree of reduced work capacity, they shall be compensated according to the average civil servant salary level, which is calculated as twice the minimum wage, as follows:

+ For a reduction in work capacity from 5% to 60%, a one-time benefit shall be provided according to the table below:

 

Degree of reduced work capacity	One-time benefit amount
From 5% to 20%	Four months' minimum wage
From 21% to 30%	Eight months' minimum wage
From 31% to 40%	Twelve months' minimum wage
From 41% to 50%	Eighteen months' minimum wage
From 51% to 60%	Twenty-four months' minimum wage

 

+ For workers suffering work-related accidents or occupational diseases who receive a one-time benefit, the employer shall be responsible for arranging suitable and long-term employment to stabilize their living conditions.

+ For a reduction in work capacity from 61% to 100%, monthly benefits shall be provided according to the disability grade (starting from the day of discharge) as specified in the table below:

 

 

- For workers suffering work-related accidents resulting in a reduction in work capacity of 81% or more and unable to ensure personal living due to spinal paralysis, blindness in both eyes, amputation of both limbs, severe mental illness, they shall receive a service allowance of 80% of the minimum wage.

- For workers suffering work-related accidents causing damage to functions such as legs, hands, ears, eyes, teeth, spine, etc., they shall be provided with appropriate aids for daily life once, corresponding to the functional losses.

- When the wound recurs, they shall be treated again and re-examined for disability.

- If an employee dies as a result of a work-related accident (including during the initial treatment period), their family shall receive a one-time benefit of 24 months' minimum wage and shall also enjoy the death benefit regime as stipulated in Part V of this Circular.

- Workers receiving one-time or monthly work-related accident benefits, if meeting the conditions, shall still be entitled to retirement benefits as stipulated in Part IV of this Circular.

2- Benefits for occupational diseases:

a) Conditions for receiving benefits:

Employees suffering from occupational diseases listed in the occupational disease directory as prescribed in Circulars No. 8-LB/TT dated May 19, 1976 and No. 29-LB/TT dated December 25, 1991 issued jointly by the Ministry of Health, Ministry of Labor, Invalids and Social Affairs, and the General Confederation of Trade Unions of Vietnam.

b) Benefits Received:

Salary and medical examination and treatment costs during the period of occupational disease treatment, health examination, and one-time and monthly benefits, service allowances, and other benefits for those suffering from occupational diseases shall be applied as for those suffering from work-related accidents as stipulated in point b, item 1, part III of this Circular.

IV- Retirement benefits

1- Monthly retirement benefits:

a) Conditions for receiving monthly pension when meeting the following two conditions:

a.1) Having contributed to social insurance for at least 20 years (240 months);

a.2) Age: Male reaching 60 years, female reaching 55 years.

The retirement age (referred to as the retirement age) may be increased or decreased in the following cases:

- The retirement age can be increased by up to 5 years (male not exceeding 65 years, female not exceeding 60 years) for special cases where the employer needs to retain them for work (except administrative and public service sectors which must have vacant positions) and the employee is in good health and voluntarily wishes to continue working.

- The retirement age can be decreased by up to 5 years (male not less than 55 years, female not less than 50 years) for persons belonging to one of the following categories:

+ Having worked in heavy, hazardous jobs or occupations for 20 years; working in areas with regional allowances of coefficients 0.7 and 1 (if intermittent, the periods can be cumulatively added).

Heavy, hazardous jobs or occupations are those classified as type IV or higher according to the labor classification table as decided by Decision No. 278-LĐ/QĐ dated November 13, 1976 of the Ministry of Labor; occupations under the hazardous pay scale issued by Decree No. 235-HĐBT dated September 18, 1985 of the Council of Ministers (now the Government) and the list of heavy, hazardous, and dangerous jobs issued by Circular No. 19-LĐTBXH/TT dated December 31, 1990 of the Ministry of Labor, Invalids and Social Affairs, and subsequent supplementary regulations of the Ministry of Labor, Invalids and Social Affairs or agreements allowing other Ministries to issue; areas with regional allowances of coefficients 0.7 and 1 as stipulated in Circular No. 15-LĐTBXH dated June 2, 1993;

+ Having worked in the South battlefield, C battlefield before April 30, 1975, or K battlefield before August 31, 1989. The working time in these battlefields can be cumulatively added.

+ Having worked before July 20, 1954;

+ State workers and civil servants subject to reduction in staffing and labor restructuring as stipulated in Decision No. 176-HĐBT dated October 9, 1989 or Decision No. 111-HĐBT dated April 12, 1991 of the Council of Ministers (now the Government);

In cases where these subjects have at least 20 years of work experience in heavy, hazardous, or difficult conditions, or have received a regional allowance of 0.7 and 1, or have at least 10 years of service in the Southern battlefield, C battlefield, or K battlefield, they may be eligible for a reduced retirement age not exceeding five years (men not younger than 50 years old, women not older than 45 years old).

b) Benefits Received:

b.1) One-time retirement benefit:

- Persons with 20 to 30 years of social insurance contributions shall receive a one-time benefit equivalent to one month's salary.

- Persons with more than 30 to 35 years of social insurance contributions shall receive a one-time benefit equivalent to two months' salary.

- Persons with over 35 years of social insurance contributions shall receive a one-time benefit equivalent to three months' salary.

For those working in the state sector, the salary for calculating the one-time benefit is the salary of the month prior to retirement, including grade salary, rank salary, position salary, position allowance, seniority allowance, retention coefficient, regional allowance, and hardship allowance (if applicable).

For those working outside the state sector or who have worked both inside and outside the state sector, the salary for calculating the one-time retirement benefit is based on the average monthly social insurance contribution salary (as detailed in point b.2 below).

b.2) Monthly pension:

The basis for calculating the monthly pension is the number of years of social insurance contributions (calculated in full years, if there are six months or more, it counts as one year) and the average monthly social insurance contribution salary, specifically as follows:

- For state workers and civil servants: the pension is calculated based on the average monthly social insurance contribution salary of the last ten years before retirement (hereinafter referred to as the average monthly social insurance contribution salary). This average salary is calculated by dividing the total amount of monthly social insurance contribution salaries over the ten years by 120 months.

In cases where state workers and civil servants retire and their average monthly social insurance contribution salary for the last ten years before retirement includes periods before the implementation of the new salary system (April 1, 1993), the period from September 1, 1985 onwards is taken into account to calculate the salary levels according to the salary scale specified in Decree No. 235-HĐBT dated September 18, 1985 of the Council of Ministers (now the Government), Decision No. 58-QĐ/TW dated September 18, 1985 of the Central Committee Secretariat, converted to corresponding grade, rank, and position salaries under the new salary system, including position allowances (if applicable) to calculate the pension. Specifically:

+ Holders of elected positions and specialized staff in the judiciary and prosecution sectors, holders of elected positions managing state administration from provincial to district level, civil servants and employees in public administrative and service sectors, holders of elected positions and cadres, workers, and employees in Party organizations, mass organizations, and associations convert old salaries to new salaries according to Decision No. 35-NQ/UBTVQH9 dated May 17, 1993 of the Standing Committee of the National Assembly, Decision No. 69-QĐ/TW dated May 17, 1993 of the Central Committee Secretariat, Decree No. 25-CP dated May 23, 1993 of the Government, Decision No. 574-TTg dated November 25, 1993 of the Prime Minister, Decree No. 5-CP dated January 26, 1994 of the Government, Circular No. 10-LB/TT dated June 2, 1993, Circular No. 5-LB/TT dated February 4, 1994, Circular No. 25-LB/TT dated September 13, 1993 of the Ministry of Labor, Invalids and Social Affairs - Ministry of Finance - Civil Service Bureau of the Government (examples in the attached annexes to the circulars).

+ Workers and civil servants in state-owned enterprises convert old salaries to new salaries according to Decree No. 26-CP dated May 23, 1993 and Decree No. 5-CP dated January 26, 1994 of the Government and Circular No. 12-LB/TT dated June 2, 1993 of the Ministry of Labor, Invalids and Social Affairs - Ministry of Finance - Civil Service Bureau of the Government (examples in the attached annexes to the circulars).

- For those who have worked both in the state sector and outside the state sector such as joint ventures, foreign-invested enterprises, private enterprises, etc., the calculation of the average monthly social insurance contribution salary is as follows:

+ Calculate the average monthly social insurance contribution salary during the time worked in the state sector as directed for state workers and civil servants. Then multiply the average monthly social insurance contribution salary by the total number of months worked in the state sector to determine the total value of the social insurance contribution salary in the state sector.

+ Calculate the average monthly social insurance contribution salary during the time worked outside the state sector, then multiply by the total number of months of social insurance contributions during the time worked outside the state sector to determine the total value of the social insurance contribution salary during the time worked outside the state sector.

After that, sum the total values of the social insurance contribution salaries from both sectors, divide by the total number of months of social insurance contributions from both sectors within and outside the state sector to determine the overall average monthly social insurance contribution salary as the basis for calculating the pension (examples in the attached annexes to the circulars).

- For those working outside the state sector, the calculation of the average monthly social insurance contribution salary is as follows:

+ If social insurance contributions are made according to a single salary scale, the calculation of the average monthly social insurance contribution salary is carried out as for those working in the state sector.

+ If social insurance contributions are made according to multiple salary scales during the course of employment, the calculation of the average monthly social insurance contribution salary is carried out by averaging each period separately, then averaging the results of all periods as for those who have worked both in the state sector and outside the state sector.

b.3) Monthly pension rate:

A person who has contributed to social insurance for twenty years shall be entitled to a pension equal to fifty-five percent of the average monthly salary for social insurance contributions, with an additional two percent for each year of contribution beyond twenty years, up to a maximum of seventy-five percent of the average monthly salary for social insurance contributions.

The minimum pension level guaranteed shall not be less than the minimum wage.

(The specific method of calculating the pension is detailed in the annex attached to this Circular).

2- One-time retirement benefit system.

a) Conditions for receiving the benefit:

- A person who has reached the age specified but has not contributed to social insurance for twenty years;

- A person who has not reached the specified age (regardless of the number of years of social insurance contributions) but due to health reasons (not caused by work-related accidents or occupational diseases) is confirmed by the Medical Appraisal Board to have a reduced ability to work of sixty-one percent or more.

b) The basis for calculating the one-time retirement benefit is based on the number of years of social insurance contributions;

The amount of the one-time benefit is calculated based on the number of years of social insurance contributions: for each year of contribution, the benefit is equivalent to one month's average monthly salary for social insurance contributions before retirement.

The calculation of the average monthly salary is as prescribed in the monthly retirement benefit system (Section IV, Point b.2).

3- For workers who have not yet reached the retirement age but have contributed to social insurance for twenty years or more, if for some reason they cannot continue working and contributing to social insurance, when they reach the retirement age as stipulated, they will be entitled to a monthly pension, but the management agency must prepare a file to send to the Department of Labor - Invalids and Social Affairs or the social insurance management agency for review and follow-up resolution.

V- Death benefits

1. Funeral expenses.

a) Applicable subjects:

- Current contributors to social insurance under the provisions of Section B of this Circular, including those who have stopped working and are awaiting resolution of their retirement benefits.

- Those receiving a pension, monthly disability allowance, or monthly compensation for work-related accidents or occupational diseases.

b) The funeral expense amount is seven months of the minimum wage. The person handling the funeral receives this funeral expense amount.

2. Monthly survivor's allowance.

a) Applicable subjects:

Workers who have contributed to social insurance for fifteen years or more and have died; those receiving a monthly pension; those receiving monthly compensation for work-related accidents or occupational diseases as stipulated in Section III of this Circular, and those who die due to work-related accidents or occupational diseases, their relatives who directly supported them while alive and belong to the following categories are entitled to a monthly survivor's allowance:

- Biological parents, parents-in-law, legal foster parents, spouse who has reached the retirement age (men aged sixty, women aged fifty-five) or have not yet reached the retirement age but have a reduced ability to work of eighty-one percent or more. Among these individuals, if they are currently receiving a salary, pension, disability allowance, or monthly compensation for work-related accidents or occupational diseases, they will not be entitled to a monthly survivor's allowance.

- Children under sixteen years old (including biological children, legally adopted children, illegitimate children recognized by law, and children born during pregnancy when the father dies) or children over sixteen years old with a reduced ability to work of eighty-one percent or more.

b) The amount of the monthly survivor's allowance:

The monthly survivor's allowance for one relative is twenty-five percent of the minimum wage, with a maximum of four relatives eligible for the allowance. The monthly survivor's allowance is received from the date of the worker's death.

In cases where multiple relatives of the deceased have contributed to social insurance, that relative is entitled to the corresponding monthly survivor's allowance based on the number of deceased contributors.

If the relative mentioned in point a above does not have any other source of income and has no other caregiver, they are entitled to a maintenance allowance of seventy percent of the minimum wage.

3. One-time survivor's allowance.

a) Applicable subjects:

Workers who have contributed to social insurance; those currently receiving a pension; monthly compensation for work-related accidents or occupational diseases as stipulated in Part B, Section III of this Circular, who have died, but whose relatives do not qualify for a monthly survivor's allowance, the family may receive a one-time survivor's allowance.

b) The amount of the one-time survivor's allowance:

- For current contributors to social insurance who have died, the family is entitled to a one-time survivor's allowance calculated based on the number of years of social insurance contributions; for each year, the allowance is half a month's salary for social insurance contributions, but not exceeding twelve months. For families of state sector employees, the allowance is calculated based on the salary for social insurance contributions in the month before death; for non-state sector employees or those who have worked both in the state and non-state sectors, it is calculated based on the average monthly salary for social insurance contributions (as detailed in point b.2, Section b, Part IV).

- For those receiving a pension, monthly compensation for work-related accidents or occupational diseases who have died, the family is entitled to a one-time survivor's allowance calculated based on the current pension or compensation level and the time already received: If they pass away in the first year, the one-time allowance is twelve months of pension or compensation; if they pass away from the second year onwards, each year already received reduces one month of pension or compensation, but the minimum guarantee is three months of pension and compensation.

Example: 1. Mr. A had been receiving a pension for fourteen months when he passed away, the one-time allowance is eleven months of pension (twelve months minus one month allowance).

Mr. B had retired for ten years, his monthly pension in the tenth year was 303,678 dong, he passed away at the end of the tenth year, the one-time allowance is 303,678 dong x (twelve months minus ten months) = 607,356 dong. However, according to the regulation, the one-time allowance must be at least three months, so the one-time allowance is 303,678 x 3 = 911,034 dong.

VI- Provisions for those receiving social insurance before the implementation of Decree No. 43-CP

1- Those receiving a pension, disability allowance, monthly compensation for work-related accidents or occupational diseases, rubber plantation workers receiving monthly allowances, and those receiving monthly survivor's allowances before the implementation of Decree No. 43-CP shall continue to enjoy the benefits as previously stipulated by the Council of Ministers (now the Government) and their benefit levels will be adjusted according to the regulations of the Government.

2\. Persons receiving monthly pension, disability allowance, grade 1 occupational accident compensation, grade 2 occupational accident compensation, grade 1 occupational disease compensation, and grade 2 occupational disease compensation shall be entitled to the survivor benefit regime as stipulated in this Circular upon their death.

3\. For rubber plantation workers receiving monthly allowances who die, only the funeral expenses as prescribed in this Circular shall be covered.

C\. IMPLEMENTATION PROVISIONS

I\. Subsidies and health insurance

The following subjects shall be entitled to regional subsidies, living expense subsidies (if applicable), and health insurance coverage:

- Persons receiving monthly pensions;

- Persons receiving monthly disability allowances;

- Persons receiving monthly occupational accident or occupational disease allowances;

- Rubber plantation workers receiving monthly allowances.

II\. Calculation period for social insurance benefits

The calculation period for social insurance benefits is the total number of years of social insurance contributions:

- For employees and civil servants under state management or those who were state employees and civil servants but have transferred to work at other units not under state management without yet receiving termination allowances, the actual working time as state employees and civil servants (without conversion) and social insurance contributions according to the levels prescribed during each period shall be counted as the contribution period.

- Workers in the non-state sector who are subject to mandatory social insurance and have contributed to social insurance before the issuance of this Circular, and continue to be subject to mandatory social insurance, shall have their contribution period counted towards social insurance benefits.

III\. Handling violations

1\. Suspension of social insurance entitlements:

- During the period of pre-trial detention or imprisonment.

Upon completion of the detention or imprisonment period, they will be reviewed for eligibility to receive social insurance benefits. In cases where it is concluded that they are innocent, they may claim back their pension or allowance during the suspension period.

- When fraudulent behavior is discovered to obtain social insurance benefits, depending on the severity of the violation, their benefit level may be reduced or their right to social insurance benefits revoked.

2\. Revocation of social insurance entitlements:

- Individuals convicted of treason against the country;

- Individuals who leave the country illegally or remain abroad illegally;

- Individuals who receive social insurance benefits through falsified documents.

3\. Employers, employees, officials, and staff of social insurance organizations who violate the implementation of social insurance regimes shall be subject to administrative penalties or criminal prosecution according to current laws.

IV\. Effective date

Until the establishment of a social insurance organization as provided for in Decree No. 43-CP, the Vietnam General Confederation of Labor shall manage and implement sick leave, maternity, occupational accident, or occupational disease benefits. The Ministry of Labor, Invalids, and Social Affairs shall manage and implement retirement and survivor benefits (including previous disability benefits).

This Circular takes effect from January 1, 1994. However, the three regimes of sick leave, maternity, and occupational accident or occupational disease benefits take effect from July 1, 1994. All previous regulations on social insurance that conflict with this Circular are hereby abolished.

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

ANNEX

(Attached to Joint Circular No. 21-LB/TT dated June 18, 1994

of the Ministry of Labor, Invalids, and Social Affairs and the Ministry of Finance)

Calculation of average salary for social insurance contributions

and pension

Example 1: A civil servant has 35 years of social insurance contributions, retires on January 1, 1994, and had the following salary changes in the 10 years prior to retirement:

- From September 1, 1985 to December 31, 1985, received a salary of 390 dong

- From January 1, 1986 to December 31, 1989, received a salary of 425 dong

- From January 1, 1990 to March 31, 1993, received a salary of 463 dong

- From April 1, 1993, the salary was adjusted to a factor of 3.91.

The monthly pension calculation is as follows.

1\. Calculation of the average salary for social insurance contributions:

a\. Conversion of salaries from September 1985 to new salary levels:

- Salary of 390 dong converted to 3.06 x 120,000 dong = 367,200 dong

- Salary of 425 dong converted to 3.35 x 120,000 dong = 402,000 dong

- Salary of 463 dong converted to 3.91 x 120,000 dong = 469,200 dong

b\. Total salary for social insurance contributions from September 1985 to December 1993:

- From September 1985 to December 1985:

4 months x 367,200 dong = 1,468,800 dong

- From January 1986 to December 1989:

48 months x 402,000 dong = 19,269,000 dong

- From January 1990 to December 1993:

48 months x 469,200 dong = 22,521,600 dong

Total: 100 months = 43,286,400 dong

c\. Average salary for social insurance contributions is:

43,286,400 dong / 100 months = 432,864 dong.

2\. Monthly pension is 75% of the average salary for social insurance contributions:

432,864 dong x 75% = 324,648 dong

Example 2:

An officer who transferred from military service has 32 years of social insurance contributions, retires on April 1, 1994. The rank when transferring was major with 24 years of military service. The salary changes for social insurance contributions in the 10 years prior to retirement are:

- From September 1, 1985 to March 31, 1986, received a salary of major 350 dong, plus a 24% seniority allowance.

- From April 1, 1986 to March 31, 1990, received a salary of 390 dong

- From April 1, 1990 to March 31, 1993, received a salary of 425 dong

- From April 1, 1993, the salary was adjusted to a factor of 3.35.

The monthly pension calculation is as follows:

1\. Calculation of the average salary for social insurance contributions:

a\. Conversion of salaries from September 1985 to new salary levels:

- Major salary of 350 dong converted to

3.8 x 120,000 dong = 456,000 dong

- Salary of 390 dong converted to 3.06 x 120,000 dong = 367,200 dong

- Salary of 425 dong converted to 3.35 x 120,000 dong = 402,000 dong

b\. Total salary for social insurance contributions from September 1985 to March 1994:

- From September 1985 to March 1986:

Military rank salary: 456,000 dong

Seniority allowance (24%): 109,440 dong

Total: 565,440 dong

7 months x 565,440 dong = 3,958,080 dong

- From April 1986 to March 1990:

48 months x 367,200 dong = 17,625,600 dong

- From April 1990 to March 1993:

36 months x 402,000 dong = 14,472,000 dong

- From April 1993 to March 1994:

12 months x 402,000 dong = 4,824,000 dong

Total: 103 months = 40,879,680 dong

c\. Average salary for social insurance contributions is:

40,879,680 dong / 103 months = 396,890 dong

2\. Monthly pension is 75% of the average salary for social insurance contributions:

396,890 dong x 75% = 297,668 dong

Example 3: A Deputy Chairman of a Provincial People's Committee has 40 years of social insurance contributions, retires on September 1, 1995, and had the following salary changes in the 10 years prior to retirement:

- From September 1985 to October 1986: Receiving the salary of Director of the Department of Education at 513 dong.

- From November 1986 to November 1989: Director of the Department of Education with a salary of 555 dong.

- From December 1989 to March 1993: Deputy Chairman of the Provincial People's Committee with a salary of 599 dong.

- From April 1993 to August 1995: New salary coefficient 6.2.

The monthly pension calculation is as follows:

1\. Calculation of the average salary for social insurance contributions:

a) Conversion of salaries from September 1985 to new wages:

- Salary 513 dong (Director of the Department) converted to 4.19

- Position allowance (Director of the Department): 0.7

Total: 4.89 x 120,000 dong = 586,800 dong

- Salary 555 dong converted to 4.75

- Position allowance: 0.7

Total: 5.45 x 120,000 dong = 654,000 dong

- Salary 599 dong (Deputy Chairman of the Provincial People's Committee) converted:

6.2 x 120,000 dong = 744,000 dong

b) Total social insurance wage contributions from September 1985 to August 1995:

- From September 1985 to October 1986:

14 months x 586,800 dong = 8,215,200 dong

- From November 1986 to November 1989:

37 months x 654,000 dong = 24,198,000 dong

- From December 1989 to August 1995:

69 months x 744,000 dong = 51,336,000 dong

Total: 120 months = 83,749,200 dong

c\. Average salary for social insurance contributions is:

83,749,200 dong : 120 months = 697,910 dong

2\. Monthly pension is 75% of the average salary for social insurance contributions:

697,910 dong x 75% = 523,433 dong

Example 4: A mechanical worker has 25 years of social insurance contributions and retired on September 1, 1998, with the following wage progression in the ten years prior to retirement:

- From September 1988 to October 1992: Grade 5 salary 315.50 dong

- From November 1992 to March 1993: Grade 6 salary 336.00 dong

- From April 1993: Grade 6 salary converted to new salary coefficient 2.67.

The monthly pension calculation is as follows:

1\. Calculation of the average salary for social insurance contributions:

a) Conversion of salaries from September 1988 to new wages:

- Salary 315.50 dong converted to 2.18 x 120,000 dong = 261,600 dong

- Salary 336.00 dong converted to 2.67 x 120,000 dong = 320,400 dong

b) Total social insurance wage contributions from September 1988 to August 1998:

- From September 1988 to October 1992:

50 months x 261,600 dong = 13,080,000 dong

- From November 1992 to August 1998:

70 months x 320,400 dong = 22,428,000 dong

Total 120 months = 35,508,000 dong

c\. Average salary for social insurance contributions is:

35,508,000 dong : 120 months = 295,900 dong

2- Monthly pension equals 65% of the average social insurance wage contribution:

295,900 dong x 65% = 192,335 dong

Example 5: A worker who retired had a state employment history from January 1962 to February 1989; from March 1989 to May 1994, he transferred to work at a foreign-invested enterprise.

1- Calculate the average social insurance wage contribution as a worker in the state sector.

- From September 1985 to February 1989: Grade 5 salary 315.50 dong.

Converted to the new wage level under Decree No. 26-CP is:

2.18 x 120,000 dong = 261,600 dong

- Calculate the total value of social insurance wage contributions during the time working in the state sector.

261,000 dong x 326 months = 85,281,600 dong

2- Calculate the average social insurance wage contribution when working as a worker at a foreign-invested enterprise:

- From March 1989 to June 1991: 50 dollars, converted according to the exchange rate at retirement (1 dollar = 10,800 dong) to 540,000 dong:

540,000 dong x 28 months = 15,120,000 dong

- From July 1991 to May 1994: 65 dollars, converted according to the exchange rate at retirement (1 dollar = 10,800 dong) to 702,000 dong:

702,000 x 34 months = 23,868,000 dong

Total: 62 months = 38,988,000 dong

- The average social insurance wage contribution is:

38,988,000 dong : 62 months = 628,838.71 dong

- Calculate the total value of social insurance wage contributions during the time working outside the state sector:

628,838.71 dong x 62 months = 38,988,000 dong

3- Calculate the overall average social insurance wage contribution for both periods within and outside the state sector:

- Total value of social insurance wage contributions:

85,281,600 dong + 38,988,000 dong = 124,269,600 dong

- Total period of social insurance contributions:

326 months + 62 months = 388 months.

- Overall average social insurance wage contribution is:

124,269,600 dong : 388 months = 320,282.47 dong

4- Monthly pension equals 75% of the overall average social insurance wage contribution:

320,282.47 dong x 75% = 240,211.85 dong.