New pension rule puts female employees at disadvantage

According to the 2014 Law on Social Insurance, from January 01 this year, female employees retiring in 2018 will receive lower pensions (up to 10%) in comparison to those having the same social insurance contribution duration but retire in 2017. The Law also provides that workers will have to contribute social insurance for five more years, meaning 30 years for women and 35 years for men, to enjoy the highest pension rate of 75%.

However, the law stipulates an annual increase in the period of social insurance contribution until 2022 to be eligible for the maximum pension for men only, which is unfair to women.

Vietnam Social Security Deputy General Director Pham Luong Son said social insurance agencies should propose suitable pension calculations to ensure fairness between male and female workers. Particularly, the annual increase in the period of social insurance contribution should be applied to women as well.

The National Assembly has not decided if the schedule to change pension calculations this year would be amended or not despite many proposals. Therefore, retired female employees will receive pensions which are 5% to 10% lower than previously, Son said.

The Ministry of Labor, Invalids and Social Affairs earlier submitted two solutions for calculating pensions for female workers from 2018. For the first one, when hiking basic salaries and pensions by 7%, a larger increase should apply to employees with lower pensions. Particularly, employees with pensions of VND80 million or higher a month will enjoy a hike of 4-5% from July 1 while the rate may be higher than 7% for those receiving pensions of less than VND2 million. The Ministry also proposed increasing gradually the social insurance contribution period for females.

The new social insurance regulations will be in effect in 02 more months. Therefore, during the policy transition period, employees have no choices but have to accept the fact. To deal with the above shortcomings, a large number of opinions have requested that Articles 56 and 74 of the 2014 Law on Social Insurance need to be considered and amended by adjusting methods of calculation of the pension rates applicable to females under a gradual increase roadmap to achieve the gender equality targets and limit shocks for female employees due to policy changes./.

Source: https://vov.vn/tin-24h/thay-doi-cach-tinh-luong-huu-lao-dong-nu-chiu-thiet-thoi-689210.vov (edited and translated from Vietnamese article).