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The issue of withdrawing one-time social insurance or receiving a monthly pension when having paid full 18 years of social insurance recently is attracting a lot of people’s attention.
Today, MVA Vietnam will present comparison problems so that customers can see the advantages and disadvantages of both cases. From there, you can make a decision that suits your goals.

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In order to help employees make the right choice for themselves, the following situation will compare the case where an employee receives a lump-sum social  insurance  (SI) with a monthly pension.

In case of receiving one-time social insurance, in the future, when the employees reach retirement age, they will not have a monthly income from pensions to ensure their lives. In addition, employees will not be granted a free health insurance card to take care of their health in old age or if so, the pension will be low.

Comparative situation according to general regulations

For example: Ms. Nguyen Thi B will be 55 years and 8 months in 2022, and have participated in social insurance for 18 years by the end of 2019 (from 2002-2019).

Assume that Mrs. B’s life expectancy is 76.3 years (average life expectancy according to the results of the General Statistics Office’s 2020 population and housing census on life expectancy of women), not taking into account the impact of the following factors: Inflation rate, salary growth rate, investment interest rate of social insurance fund, have the following results:

If Ms. B decides to receive one-time social insurance, the benefit rate is:  (12 years X 1.5 months salary) + (6 years X 2.0 months salary) = 30 months salary.

Accordingly, the period of payment of social insurance premiums for which employees are entitled to one-time social insurance benefits will not be counted as the basis for calculating other social insurance benefits, and is no longer in the social insurance system protected by the State for social security.

In addition, employees will lose the opportunity to participate in health insurance for 5 consecutive years to enjoy benefits with high-tech medical services and expensive drugs. accident while waiting for one-time social insurance benefits (12 months).

Due to the deduction of the period of payment of social insurance payment received once, the employee also loses the opportunity to enjoy the monthly pension when the working age expires or the employee is eligible to enjoy but the rate is low.

If Ms. B has paid social insurance for 2 more years for full 20 years, the pension she will receive in about 20 years is:  20 years X 12 months X 45% = 108 months’ salary.

In addition to the monthly pension, Mrs. B will be adjusted to her pension on the basis of the increase in the consumer price index and economic growth in accordance with the state budget and the social insurance fund.

In addition, Ms. B will be granted a free health insurance card with the rate of 95% of medical examination and treatment costs for health care (monthly social insurance fund pays 4.5% of her pension). The next of kin will be entitled to a survivorship allowance upon the death of Mrs. B, including a funeral allowance equal to 10 months’ basic salary and a survivorship allowance.

Comparative situation of the case where the average salary level is used as a basis for paying social insurance contributions

Example: An employee has full 20 years of paying social insurance premiums (from 2001 to 2020), with the average salary as the basis for social insurance payment is VND 4,000,000/month.

Assuming employees are eligible for a pension or a lump-sum social insurance benefit in 2022, the pension will be enjoyed until death (not taking into account the impact of factors such as inflation rate, wage growth rate, salary adjustment rate, etc.) retirement, investment interest rate of social insurance fund). The calculation will be as follows:

Thus, it can be seen that employees enjoying the retirement regime will have more benefits than choosing to receive one-time social insurance. This is just an example of an employee paying social insurance contributions for at least 20 years to be eligible for pension.

If employees participate in social insurance more, the benefits will be higher, not to mention that the pension level will be adjusted to increase and the longer the employee lives, the more pension benefits will be.

Thus, through the article of MVA Vietnam, customers and employees can compare and balance their own interests and goals.

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