Circular No. 3222/BTC Regarding the Deduction from Salaries of Civil Servants for Funeral Expenses and Public Funds

CIRCULAR
Issued by the Ministry of Finance to the Ministers of various ministries, Chairman of the Administrative Committee of North Vietnam, Central Vietnam, and South Vietnam.
chính Bắc Bộ, Trung Bộ và Nam Bộ.

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Pursuant to Decree No. 105 dated June 14, 1946, Article 4 stipulates that the amount deducted from salaries for retirement contributions shall be uniformly increased from 6% to 10% starting from January 1, 1946. From that date onwards, the amount of additional public fund contributions shall also increase from 7% to 10%.

The increase in retirement contributions and additional public fund contributions as prescribed above is coupled with the increase in retirement benefits for all civil servants who have reached their retirement age since October 1, 1945, pursuant to Decree No. 54 dated November 3, 1945, or those who voluntarily retired after having served for 25 years and paid sufficient retirement contributions. All civil servants in such cases shall receive retirement benefits calculated based on the fraction of seniority, meaning each year of service will be counted as 1/60 of the average salary over the last three years (instead of 1/75).

The increase in retirement benefits as mentioned above obligates the autonomous fund of the Vietnam Retirement Office to bear a significantly larger amount, necessitating additional revenue to maintain financial balance within the autonomous budget of the office, which is currently facing a financial situation where income does not meet expenses. This is the main reason for the increase in retirement contributions and additional public fund contributions, which must be clearly explained to all civil servants.

Below, the Ministry sets out the method for implementing the deduction of retirement contributions according to the new fraction:

a. Retirement contributions deducted from monthly salaries.

The decree promulgated on June 14, 1946, naturally could not be implemented immediately during the June (Gregorian calendar) salary period. However, during the July (Gregorian calendar) salary period just past, the offices responsible for deducting retirement contributions immediately applied the new rate of 10%, except for a few remote places where the decree of June 14, 1946, had not yet been received due to slow communication, thus delaying implementation.

Nevertheless, once they receive the decree, the offices responsible must immediately implement Article 4 of the decree without waiting for further instructions.

Therefore, this circular actually aims to establish the method for deducting the additional 4% (10% - 6%) of retirement contributions from January 1, 1946, until the date when the 10% deduction began.

b. Additional 4% (10% - 6%) of retirement contributions and 3% of additional public fund contributions from January 1, 1946.

According to regulations, the additional 4% of retirement contributions from January 1, 1946, should have been deducted entirely from the salary payment of July just past or at the latest from the upcoming August salary period. However, to alleviate the burden on civil servants from having to pay the entire amount of the additional retirement contribution in one period, the Ministry has agreed with the Retirement Office to allow civil servants to gradually deduct the additional amount monthly, provided that by December 31, 1946, they complete the payment of the additional amount and can immediately issue a check to transfer the remaining additional retirement contributions and additional public fund contributions to the autonomous fund of the Retirement Office from January 1, 1946.

The gradual deduction of the additional retirement contributions will be carried out as follows:

For example, if a civil servant has a regular monthly salary (excluding allowances) of 100đ. The retirement contribution deducted from the salary was previously 6đ (6%), now increased to 10đ (10%) starting from January 1, 1946. But since January 1, 1946, 6đ has been deducted monthly and checks have already been issued to transfer the deducted amounts to the Retirement Office for the first half of the year (each year divided into two periods). Thus, only the additional 4đ (10đ - 6đ) per month remains. The total additional amount to be deducted from January 1946 to June 30, 1946, is 24đ (4đ x 6 months) or 28đ (4đ x 7 months) if the new rate of 10% was not applied promptly from July.

When issuing the salary check for the upcoming August, the additional deduction of 2 months or 3 months (8đ or 12đ) must be made immediately. The remaining 16đ will be deducted gradually at 4đ per month (additional one month) starting from September (Gregorian calendar).

Following this method, by the end of 1946, the civil servant will have fully deducted the additional amount owed to the Retirement Fund from January 1, 1946.

According to current regulations (Article 60 of the Circular dated March 12, 1943), each year, only two checks are issued to transfer retirement contributions and additional public fund contributions to the Retirement Fund; one check issued in the week of July to cover the first half of the year; one check issued in the week of January of the following year to cover the second half of the previous year. By the end of 1946, after deducting the regular monthly retirement contributions and the additional amount according to the method described above, the offices responsible will only need to issue one check summarizing the total deductions from salaries and the additional amount of the additional public fund contributions (10% - 7%) to transfer the total amount to the Retirement Fund.

In summary, the gradual deduction of the additional retirement contributions as described above not only complies with the current accounting regulations of the Retirement Office but also makes it easier for civil servants to pay the additional retirement contributions, as the monthly salary will not noticeably decrease due to the immediate deduction in one salary period.

Moreover, the Ministry has delayed issuing instructions until now, waiting until civil servants received additional allowances for rice and land, before instructing on the deduction of the additional retirement contributions from January 1, 1946, with the aim of helping civil servants easily pay the additional retirement contributions without seeing their monthly salary reduced, thanks to the recently received supplementary allowance for expensive rice.

The Ministry requests that the relevant ministries, departments, and offices immediately distribute this circular to subordinate offices to ensure timely implementation for the upcoming August salary period.