VI Currently, with the innovation and change in the base salary issued by the Government in the Decree 24/2023/ND-CP dated May 14, 2023, stipulating the base salary for cadres, civil servants and employees. authorities and armed forces. So how will pensions change? Through today’s article, let’s learn more about this issue with Pham Consult!
If the base salary is increased, how will the pension change?
According to the 2014 Law on Social Insurance, the pension enjoyment of employees with a period of participation in social insurance will be calculated based on the time of payment of social insurance and the average salary/monthly income on which social insurance premiums are based.
However, Article 56 and Article 71 of the Law on Social Insurance 2014 stipulate that the lowest pension when participating in compulsory social insurance is equal to the base salary.
For the group of employees participating in social insurance before January 1, 2016, the pension enjoyment level is based on the base salary at the time of enjoying the retirement regime. Therefore, in case the base salary increases, the pension will also increase accordingly.
From July 1, 2023, increase the base salary for cadres, civil servants and public employees to 1.8 million VND/month. Currently, the applied base salary is 1.49 million VND/month.
Basis for calculating the pension benefit:
According to the provisions of Article 63 of the Law on Social Insurance 2014, the adjustment of salary on which social insurance premiums are based as a basis for calculation of pensions and lump-sum allowances is as follows:
– The salary paid for social insurance as a basis for calculating the average monthly salary on which social insurance premiums are based for employees specified in Clause 1, Article 89 of the Law on Social Insurance 2014 shall be adjusted according to the base salary at the time of enjoying the retirement regime. for employees participating in social insurance before January 1, 2016.
For employees who start participating in social insurance from January 1, 2016 onwards, the salary paid for social insurance as a basis for calculating the average monthly salary on which social insurance premiums are based shall be adjusted as follows:
– The salary paid for social insurance as a basis for calculating the average monthly salary on which social insurance premiums are based for employees specified in Clause 2, Article 89 of the Law on Social Insurance 2014 shall be adjusted on the basis of the consumer price index of each period in accordance with the provisions of this Law. Government regulations.
Thus, for the group of employees participating in social insurance before January 1, 2016, the pension enjoyment level is based on the base salary at the time of enjoying the retirement regime. In case the base salary increases, the pension benefit will also increase.
In addition, according to the Law on Social Insurance 2014, the social insurance benefits include: The level of convalescence allowance after sickness; One-time allowance when giving birth; Nursing care level after maternity; Funeral allowance level; The monthly survivorship allowance is based on the base salary, for example:
– Clause 3, Article 29 of the Law on Social Insurance 2014 stipulates that the level of enjoyment for convalescence and health rehabilitation after being sick for one day is equal to 30% of the base salary.
– Clause 3, Article 41 of the Law on Social Insurance 2014 stipulates that the level of enjoyment of the convalescence and health rehabilitation regime after maternity for one day is equal to 30% of the base salary…
Thus, in case the base salary increases from 1,490,000 VND/month to 1,800,000 VND/month, the above allowances will also be adjusted up by the corresponding proportion based on the provisions of law. . Through this article, Pham Consult has learned more about the change of pension after increasing the base salary. If you have any questions, please contact Pham Consult!
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