Those retiring in 2022 should be aware of the new points regarding the pension scheme that will apply.

Increase retirement age in 2022

Article 169 of the Labor Code 2019 stipulates the retirement age of employees working under normal conditions as follows:

The retirement age of employees under normal working conditions is adjusted according to the roadmap until they reach 62 years old for male employees in 2028 and 60 years old for female employees in 2035.

From 2021, the retirement age of employees under normal working conditions is full 60 years and 3 months for male employees and full 55 years and 4 months for female employees.

After that, every year increases by 3 months for male employees and 4 months for female employees.

Thus, the retirement age of employees in 2022 will increase slightly compared to 2021.

Specifically, the retirement age in 2022 for male employees is 60 years and 6 months and for female employees it is 55 years and 8 months.

Working under normal conditions

In addition, if the employee has a reduced working capacity or does a job with arduous, hazardous or dangerous elements, or works in an area with extremely difficult socio-economic conditions, Employees can also retire early.

How will the pension rate in 2022 change?

Pursuant to Articles 56 and 74 of the Law on Social Insurance in 2014, the employee's pension entitlement is calculated as follows:

Pension = Benefit rate x Average salary/monthly income on which social insurance premiums are based

In which, the rate of pension enjoyment in 2022 is determined as follows:

For female employees:

- Full payment of 15 years of social insurance: Calculate 45%.

- After that: For every additional year, add 2%.

- The maximum rate is 75%.

The calculation of this rate in 2022 has not changed compared to 2021, so the female employee's 2022 pension is still calculated as in 2021.

For male employees:

- Pay full 20 years of social insurance: Calculate 45%.

(In 2021, only need to pay 19 years of social insurance is calculated 45%)

- After that: For every additional year, add 2%.

- The maximum rate is 75%.

Accordingly, if only paying at least 20 years of social insurance, male employees when they retire in 2022 will only enjoy the rate of 45%. Meanwhile, with the same 20 years of paying social insurance but retiring in 2021, the benefit rate is 47%.

Thus, with this calculation, male employees who retire from 2022 onward will enjoy a lower pension than those who retire in 2021 with the same payment period of social insurance.

Foreigners are also entitled to pension from 2022

Clause 2, Article 17 of Decree 143/2018/ND-CP regulating social insurance for foreigners stipulates: The regimes specified in Articles 9 and 10 of this Decree take effect from January 1. 2022.

Accordingly, the retirement and survivorship regimes for foreigners will be applied from January 1, 2022.

Pursuant to Clause 1, Article 9 of Decree No. 143/2018/ND-CP, foreign workers are entitled to monthly pension benefits if they fully satisfy the following conditions:

Full retirement age: The retirement age of foreign workers is similarly determined for employees who are Vietnamese citizens.

Pay social insurance contributions from full 20 years or more.

The rate of pension enjoyment of foreign workers is calculated similarly to that of employees who are Vietnamese citizens.

In particular, if there is no need for a pension, a foreign worker can also request a one-time withdrawal of social insurance in one of the following cases:

Having reached the retirement age but have not yet paid full 20 years of social insurance.

Are suffering from one of the diseases such as cancer, polio, cirrhosis of the liver ascites, leprosy, severe tuberculosis, HIV infection that has turned to AIDS and other diseases as prescribed.

Eligible for pension but do not continue to reside in Vietnam.

Upon termination of a contract or work permit, the practice certificate or license expires without being renewed.