Mr. Tran The Dung's Company (in Hanoi City) equitizes and arranges redundant labor according to Decree No. 63/2015 / ND-CP. Accordingly, employees retires before the age are supported by the State 1 month base salary for each year of social insurance payment.

Mr. Dung would like to ask,  is the amount of 1 month base salary supported by the State equal (=) the current salary coefficient multiplied (x) the base salary (VND 1,390,000)?

Regarding this matter, Lawyer Tran Van Toan, the Khanh Hung Law Office, the Hanoi Bar Association responded as follows:

On July 22, 2015, the Government issued Decree No. 63/2015 / ND-CP stipulating policies for redundant employees when rearranging one-member limited liability companies  owned by the State.

In Clauses 1 and 2, Article 3 of this Decree prescribe policies for redundant employees who were last recruited before April 21, 1998 or before April 26, 2002, at the time that competent agenciesapprove the labor arrangement plan or the Court decides to open bankruptcy procedures as follows:

1. Male redundant employees from 55 years old to 59 years old and female redundant employees from 50 years old to 54 years old who have been paying social insurance for at least 20 years are eligible for retirement pension according to the regulations in Clause 1 Article 50 of the Law on social insurance 2006 (applicable to people who retire before January 01st, 2016) or according to the regulations in Clause 4 Article 54 of the Law on social insurance 2014 (applicable to people who retire from January 01st, 2016 or later) and are eligible for the following benefits:

-  Retirement pension is not reduced due to premature retirement;

- A pension equivalent to 03-month salary shall be provided for every year of retirement (regardless of odd months) before the regular time specified in Point a Clause 1 Article 50 of the Law on social insurance 2006 (applicable to people who retire before January 01st, 2016) or in Point a Clause 4 Article 54 of the Law on social insurance 2014 (applicable to people who retire from January 01st, 2016 or later);

-  A pension equal to 01 month’s salary regulated by the Government shall be provided for every working year having social insurance

-  Male redundant employees from over 59 years old to under 60 years old and female redundant employees from over 54 years old to under 55 years old who have been paying social insurance for at least 20 years are eligible for retirement pension according to the regulations in Clause 1 Article 50 of the Law on social insurance 2006 (applicable to people who retire before January 01st, 2016) or according to the regulations in Clause 4 Article 54 of the Law on social insurance 2014 (applicable to people who retire from January 01st, 2016 or later) and are eligible for the following benefits:

-  Retirement pension is not reduced due to retirement before regular time;

-  A pension equal to 0.5 month’s salary regulated by the Government shall be provided for every working year having social insurance.

Article 3 of Decree No. 72/2018 / ND-CP dated May 15, 2018 of the Government stipulates that from July 1, 2018, the base salary is VND 1,390,000/month.

Thus, as of October 2018, Male redundant employees from 55 years old to under 60 years old and female redundant employees from 50 years old to 54 years old who have been paying social insurance for at least 20 years are eligible for retirement pension and are not reduced due to premature retirement, but supported 1 month basic salary (VND 1,390,000 / month) for each working year with social insurance. Specifically, the support rate is VND 1,390,000 x the number of working years with social insurance.

The calculation of Mr. Tran The Dung stated is the method of calculating the monthly salary paid to employees according to the wage scale and payroll prescribed by the State thatcompanies register to apply. That calculation is not in accordance with the provisions on the level of support for redundant employees to retire before the age specified in Clause 1 and Clause 2 Article 3 of Decree No. 63/2015 / ND-CP.

Lawyer Tran Van Toan,

theKhanh Hung Law Office, the Hanoi Bar Association