A social insurance worker (right) delivers leaflets about social insurance benefits to a resident in the northern province of Nam Định. — VNA/VNS Photo Công Luật

As of April this year, a total of 471 people receive a monthly pension of more than VNĐ20 million ($850), said VSS. All of them worked in private companies or foreign enterprises in Việt Nam and had paid social insurance at a high level.

The man with the highest pension in the country, referred to as T. throughout this article, lives in HCM City. 

Before retiring, T. was chairman of the members' council and general director of a company operating in Việt Nam.

T. retired in April 2015 with a pension of more than VNĐ87.3 million ($3,700) per month.

After five adjustments of the State pension, by June this year, T.'s pension is more than VNĐ124 million per month.

T. paid social insurance premiums for 23 years during the period before 2007 when a person's salary was taken as the basis for social insurance payment, T.’s social insurance premium was very high.

There were times when T.’s average social insurance fee was more than VNĐ200 million ($8,500) per month.

When the Law on Social Insurance 2006 came into effect, the maximum monthly fee for compulsory social insurance was equal to 20 months of the general minimum salary. Accordingly, from January 2007 to March 2015, T. always paid social insurance premiums at the highest rate as prescribed, with an average salary of VNĐ15.4-23 million ($650-980) per month.

Adjustment

Statistics last year showed that the average social insurance was VNĐ5.73 million ($240) per month, equal to 76 per cent of workers’ average income.

Foreign direct investment (FDI) enterprises have the highest social insurance payment.

However, some enterprises separate or transfer allowances to other benefits so that they do not have to pay social insurance.

Therefore, the social insurance is only slightly higher than the minimum wage. This payment makes the pension very low.

To improve the situation, the amended social insurance law has two options for lump-sum payments.

The first option allows the employee to receive full pay-out for the entire period of participating in social insurance and then would not be entitled to a monthly pension.

As per the second option, the employee would receive a lump-sum payment for at most half of the period of contributions to the retirement and survivorship allowance fund. The remaining period would be reserved for calculating social insurance benefits when the employee reaches retirement age. — VNS