Viet Nam Social Security (VSS) manages and administers social security contributions and benefits (including pensions) for both private sector workers and government workers. The current pension scheme is a pay-as-you-go defined benefit (PAYG DB) scheme.
Pensions at a Glance Asia/Pacific 2024
Pensions at a Glance Asia/Pacific
Qualifying conditions
The normal pension age was 60 years 6 months for men and 55 years 8 months for women in 2022, with a minimum of 20 years of contributions. From 1 January 2021 the retirement age has been increasing by 3 months per year for men, reaching 62 in 2028 and 4 months per year for women, reaching 60 in 2035.
A lump sum payment is made for people with shorter contribution periods.
Benefit calculation
Earnings-related
45% of the insured’s average monthly covered earnings is paid for the first 20 years (men) or 15 years (women) of contributions plus 2% of the insured’s average monthly covered earnings for each year of contributions exceeding 20 years (men) or 15 years (women). The maximum accrual is 75%.
Old-age grant
If total contributions are less than 20 years, retirees receive a lump sum is paid of 1.5 times the insured’s covered average monthly earnings in the last five years for years of contributions before 2014, plus 2 times the insured’s covered average monthly earnings in the last five years for contributions since 2014.
Old-age social assistance
The minimum social pension is VND 360 000. A multiplier is applied to this minimum level: (i) 15 for those aged 60 to 79 who are living in poor households without family members, or with support from family members who are also receiving social assistance benefits; (ii) 2 for those aged 80 and over who are living in poor households without family members, or with support from family members who are also receiving social assistance benefits; and 1 for those aged 80 and over who do not have any social insurance and assistance benefits; and (iii) 3 for any older people who are living in poor households without family members but receiving support from community.
Variant careers
Early retirement
It is possible to retire and to start claiming the pension at age 55 for men and 50 for women under specific requirements. The pension is reduced by 2% of the insured’s covered average monthly earnings for each year the pension is taken before the insured’s normal pensionable age due to reduced working capacity.
Late retirement
It is not possible to start claiming a pension after the normal pension age. It is possible, however, to combine working and receiving pension.
Personal income tax and social security contributions
Taxation of workers
There is a personal allowance of VND 9 million per month.
Taxation of worker’s income
Tax rates applicable to regular annual income are as follows:
Social security contributions payable by workers
Employees pay 8% of monthly salary/wage for retirement benefits. The minimum and maximum monthly earnings for contribution and benefit calculation purposes are the minimum wage and 20 times of the minimum wage, respectively. From 1 July 2022 onwards they will be VND 3 000 000 and VND 60 000 000, respectively. In addition, employees pay 1.5% health contributions with the same ceiling as for pension contributions and 1.0% for unemployment insurance with a ceiling of 20 times the regional minimum wage – for analysis Region I is being used with a monthly minimum wage of VND 4 680 000.
Taxation of pensioners
There is no additional tax relief for pensioners.
Taxation of pension income
The same taxation rule is applied to pension benefits.
Social security contributions payable by pensioners
Pensioners do not pay any social security contribution.
Note: Real rate of return 2.5%, real earnings growth 1.25%, inflation 2%, and real discount rate 1.5%. All systems are modelled and indexed according to what is legislated. Transitional rules apply where relevant. DC conversion rate equal 90%. Labour market entry occurs at age 22 in 2022. Tax system latest available: 2022.
Source: OECD pension model.