The Government has issued Decree No. 88/2016/ND-CP providing guidance on voluntary pension schemes, effective 1 July 2016.

This is the first decree guiding specifically on this matter. Previously, various guidance was provided in circulars issued by the Ministry of Finance.

Notable points of Decree 88 include:

  • Contributions to voluntary pension schemes can be made (i) by employers solely, or together with employees or (ii) by individuals, regardless of whether or not in employment.
  • The contributions are recorded in individual pension accounts. When changing jobs, an individual can opt to carry forward his/her pension account and continue to contribute directly, or via their new employer.
  • Employers can claim a Corporate Income Tax (“CIT”) deduction for their contractual contributions, in accordance with applicable CIT regulations.
  • Employers have the right to withdraw their contributed amount together with relevant investment gains, if the employees fail to meet their obligations under the agreement.
  • Employer contributions are taxable benefits-in-kind. However, employees can deduct their contributions from their taxable income, in accordance with the applicable Personal Income Tax regulations.
  • Individuals can opt to receive payments from their pension account on a lump-sum or monthly basis.
  • When individuals reach the regulated retirement age, the monthly payment shall be for at least 10 years; after this minimum 10 year period, the individuals can withdraw a lump sum.

For more information, click PwC Newsbrief_Decree 88 on voluntary pension schemes_VN and PwC Newsbrief_Decree 88 on voluntary pension schemes_EN.


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