VOLUNTARY SOCIAL INSURANCE REGIMES

I need to participate in voluntary social insurance. I would like to ask the Lawyers if the voluntary social insurance regime is as full as the compulsory social insurance that employees participate in through employers when signing labor contracts. Thank you!

FDVN’s opinions:

Thank you for concerning and trusting in FDVN’s legal services. We have studied the law provisions to provide you with our advice. Please kindly see the answer below:

Voluntary social insurance means a form of social insurance organized by the State in which a participant may select a premium rate and a method of premium payment suitable to his/her income and the State supports his/her payment of social insurance premiums for him/her to enjoy retirement and survivorship allowance regimes.

According to Clause 2, Article 4 of the Law on Social Insurance 2014, Voluntary social insurance covers the retirement and survivorship allowance regimes as follows:

a. Retirement regime

- Conditions for enjoying retirement regime:

According to Article 73 of the Law on Social Insurance  2014 on the conditions for enjoying the retirement regime:

+ Being full 60 years old, for men, or full 55 years old, for women;

+ Having paid social insurance premiums for at least full 20 years.

Employees who satisfy the age requirement specified above but have paid social insurance premiums for under 20 years may continue paying social insurance premiums until the payment period reaches a full 20 years to enjoy a pension.

- Levels of monthly pension:

From January 1, 2016 to January 1, 2018: Must equal 45% of the average monthly income on which social insurance premiums, corresponding to 15 years of social insurance premium payment, which shall then be added with 2% for men and 3% for women for each additional year of social insurance premium payment, but must not exceed 75%.

+ From January 1, 2018: Must equal 45% of the average monthly income on which social insurance premium, and correspond to the following number of years of social insurance premium payment:

•           For male employees who retire in 2018, 2019, 2020 and 2021 and in 2022 and afterward, it is 16 years, 17, years, 18 years, 19 years and 20 years, respectively;

•           For female employees who retire in 2018 and afterward, it is 15 years.

Then, for employees defined at Points a and b of this Clause, the monthly pension shall be added with 2% for every additional year, but must not exceed 75%.

b. Survivorship allowance regime: According to Articles 80 and 81 of the Law on Social Insurance 2014, survivorship allowance regime covers the following allowances:

- Funeral allowance:

+ Subjects:

•           Employees who have paid social insurance premiums for at least full 60 months;

•           Pensioners.

+ Allowance level: The funeral allowance must equal 10 times the basic salary of the month in which the above subjects die.

- Survivorship allowance

+ Subjects:  When employees who are paying social insurance premiums, employees who have their period of social insurance premium payment reserved, or persons who are on pension die, their relatives are entitled to a lump-sum survivorship allowance.

+ Allowance level:  

- The lump-sum survivorship allowance for relatives of employees who are paying social insurance premiums or of employees who have their period of social insurance premium payment reserved shall be calculated based on the number of years of social insurance premium payment; for each year of payment, these relatives are entitled to 1.5 times the average monthly income on which social insurance premiums for the years of payment prior 2014, or 2 times the average monthly income on which social insurance premiums are based, for the years of payment since 2014.

- For employees who have paid social insurance premiums for under 1 year, the lump-sum survivorship allowance must equal the paid premium amount but not exceed 2 times the average monthly income on which social insurance premiums are based; for employees who pay both compulsory social insurance and voluntary social insurance premiums, the lump-sum survivorship allowance must equal at least 3 times the average monthly salary and income on which social insurance premiums are based.

-  For relatives of persons who die: Shall be calculated based on these persons' period of pension enjoyment; if they die within the first 2 months of pension enjoyment, such allowance must equal 48 months’ current pension; if they die in subsequent months, the allowance shall be reduced by half the monthly pension for each additional month of pension enjoyment.

Thus, according to the Law on Social Insurance 2014, employees participating in voluntary social insurance will enjoy retirement regime and survivorship allowance regime, and not enjoy maternity regime, labor accident, occupational disease… covered by compulsory social insurance which employees participate in through the employer under the provisions of the law on compulsory social insurance. 

We hope that our opinions are useful to you.

Legal advisor: Ngo My Tram

FDVN Law Firm

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