The social security in Laos is regulated by a law of 1999, implemented in 2001. It provides for a social insurance system.

The system covers employees of private-sector and state-owned enterprises with 10 or more employees, and pensioners. Civil servants, the police, and armed forces personnel are covered by a special system. Voluntary coverage is available for workers in smaller enterprises. Self-employed persons and employees of embassies and international organizations in Laos are excluded from the social security system.

Funds are contributed by both the insured person and the employer in the following proportions: (i) Insured person: 4.5% of gross monthly earnings; and (ii) Employer: 5% of monthly payroll. The minimum monthly earnings used to calculate contributions are 348,000 kip (approximately USD 40), ant the maximum monthly earnings used to calculate contributions are 1,500,000 kip (approximately USD 185).

The old-age pension benefit is available at age 60 if the insured person has at least 5 years of coverage. Retirement from gainful employment is not necessary. Early pension is available at age 55 if the person has at least 5 years of coverage. The pension may be deferred until age 65.

An old-age lump-sum benefit is paid if the insured reaches the pensionable age with less than 5 years of coverage.

The old-age pension is calculated according to the person’s total pension points multiplied by his average covered earnings in the last 12 months before retirement multiplied by 1.5%. Pension points may be earned, credited, and, under certain circumstances, purchased. For a pension point to be earned, the person’s covered annual earnings must be at least equal to the average earnings of all insured persons in that year. For a working career that began before the point system was introduced, workers are credited with 0.8 pension points per year for at least 1 year (if they were age 31 when the program was introduced) increasing up to 15 years (if they were aged 45 or older at that time).

In case of early pension, the benefit is reduced by 0.5% for each month the pension is taken before age 60. If the pension is deferred, the benefit is increased by 0.5% for each month the pension is deferred after age 60.

Benefits are adjusted at least once a year according to changes in the average insured earnings of all insured persons.

The old-age lump-sum benefit consists of a lump sum of 70% of the person’s average covered earnings in the last 12 months multiplied by the number of months of coverage and divided by 12.

The system is administered by the Ministry of Labor and Social Welfare, that supervises the program and the Social Security Organization (, which collects contributions and administers the payment of benefits.


Source:Social Security Programs Throughout the World: Asia and the Pacific, 2010, available at

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