At this stage, as an important part of the mainland's social security system, the basic old-age insurance system plays a decisive role in the quality of retirement life of the insured personnel of enterprises and institutions. It is no exaggeration to say that the higher the level of pension insurance benefits, the higher the basic quality of life after retirement; on the contrary, the lower the level of pension insurance benefits, the lower the basic quality of life after retirement, and it is impossible to talk about the retirees of enterprises and institutions if they want to provide for the old and rely on the old.
As everyone knows, at the present stage, there are two sets of basic old-age insurance systems in parallel on the mainland: one is the basic old-age insurance for urban workers, which is for the personnel of government agencies, institutions, enterprises, and flexibly employed; the other is the basic old-age insurance for urban and rural residents, and the second is for urban and rural residents who have not participated in the basic old-age insurance for urban workers and those who are flexibly employed.
So, for each of us workers, which kind of basic old-age insurance system should we choose, and how big will the gap between the two be in terms of old-age insurance benefits? This article will focus on these issues in detail.
Enterprises pay social security VS individuals pay social security
The so-called "enterprise social insurance", as the name suggests, refers to the social insurance participated by the employees of the enterprise. The Social Insurance Law of the People's Republic of China stipulates that employers must participate in enterprise social insurance for their employees in accordance with the regulations, and pay social insurance premiums on time and in full.
Taking the basic endowment insurance for urban employees as an example, the proportion of basic endowment insurance premiums paid by enterprises is generally 16% of the total salary of the unit (all of which are included in the overall fund, not included in the personal account), and the proportion of basic endowment insurance premiums paid by individuals is generally 8% of the salary paid by the individual (all of which are included in the personal account and used to pay the pension of the personal account after retirement).
The social security paid by individuals mainly includes two forms, one is to participate in the social security of urban employees as flexible employees, mainly paying endowment insurance and medical insurance, and the other is to participate in the basic endowment insurance for urban and rural residents as residents. It is worth mentioning that as a flexible employee to participate in the employee pension insurance, the contribution ratio is generally 20%, and the required insurance costs are all borne by the insured, 12% is included in the overall fund, and 8% is included in the personal account.
The basic old-age insurance for urban and rural residents adopts a one-time payment guarantee model, and insured residents can choose to match the payment grade with their economic base, and can enjoy pension treatment after 15 years of cumulative payment and 60 years old. However, compared with the social security paid by enterprises and participating in employee pension insurance as flexible employees, the level of pension treatment is relatively lower.
The formula for calculating and paying basic pension insurance benefits
(1) Corporate retirees
The basic pension benefits that workers can receive after retirement mainly include basic pension, personal account pension and transitional pension (enjoy the same payment period) through enterprise withholding and payment of basic pension insurance, and the corresponding calculation and payment formula is as follows:
Basic pension = average monthly salary of employees in full-caliber urban units in the province where the employees of the insured enterprise retire in the previous year * (1 + average contribution index) / 2 * cumulative insurance payment period * 1%
Personal account pension = the cumulative amount of personal pension account storage / the number of months of pension calculation and issuance when the employees of the insured enterprise retire
Transitional pension = the average monthly salary of employees in full-caliber urban units in the province where the insured enterprise employees are located at the time of retirement * deemed average contribution index (or average contribution index of the employee) * deemed payment period * transition coefficient
(2) Persons who actually receive benefits from the basic old-age insurance for urban and rural residents
The basic pension received by the actual recipients of the basic pension insurance for urban and rural residents also includes two parts, namely the basic pension and the personal account pension. Among them, the basic pension is determined by the central and local standards and paid in full to the insured who meets the conditions for receiving, that is, it is composed of two parts: the central basic pension and the local basic pension; the calculation and distribution method of the personal account pension is similar to that of enterprise retirees, which is divided by the cumulative storage amount of the personal pension account by the number of months of the pension.
How big is the difference in basic pension benefits?
(1) The monthly per capita basic pension level of enterprise retirees
Referring to the National Statistical Yearbook (2023), the data disclosed in it shows that the total number of retirees of the basic pension insurance for employees of mainland enterprises in 2022 is 115.309 million, and the data disclosed in the "2022 National Social Insurance Fund Expenditure Final Statement" shows that the expenditure of the basic pension insurance fund for enterprise employees in 2022 is 4,143.622 billion yuan. From these two data, we can calculate that the monthly per capita basic pension of enterprise retirees who implement the basic pension insurance system for urban employees in 2022 is 2994.6 yuan, which is less than 3000 yuan per month.
(2) The monthly per capita basic pension level of the actual recipients of the basic pension insurance for urban and rural residents
Refer to the National Statistical Yearbook (2023), which discloses data showing that in 2022, the number of people who actually received benefits from the basic old-age insurance for urban and rural residents in mainland China was 164.642 million, and the 2022 National Social Insurance Fund Expenditure Final Account According to the data disclosed in it, the expenditure of the basic pension insurance fund for urban and rural residents at the basic pension level in 2022 will be 395.091 billion yuan (of which, the basic pension expenditure will be 341.729 billion yuan; the personal account pension expenditure will be 53.362 billion yuan). From these two data, we can calculate that the monthly per capita basic pension level of the actual recipients of the basic pension insurance for urban and rural residents in 2022 is 199.97 yuan, which is only 200 yuan per capita per month after rounding.
Through the comparison of the above two sets of data, we can draw a conclusion, that is, from the perspective of the per capita basic pension level, there is a significant difference in treatment between the two. Let's take a closer look at specific examples.
Assuming that the insured employees of an enterprise in Shandong Province retire at the age of 60 in 2023, the average payment index is 0.8, the cumulative payment has been paid for 15 years, and the cumulative storage amount of the personal pension account is 65,000 yuan, then according to the calculation and distribution base of 7,468 yuan/month for the basic pension insurance treatment of employees in Shandong in 2023, we can conclude that the basic pension of the retiree is 1,475.81 yuan/month. On the premise of ignoring the adjustment and additional issuance of basic pensions, it will take nearly 3.7 years to recover the cost.
Then, let's look at the specific example of basic pension insurance for urban and rural residents. Suppose it is also a retiree in Shandong Province who enjoys the benefits of resident pension insurance, the annual payment grade is 3,000 yuan during the insurance period, and the cumulative payment for 15 years will be retired at the age of 60 in 2023. Then, on the premise of ignoring the pension insurance payment subsidy and the interest on the personal pension account, it can be calculated that the basic pension that the basic pension of urban and rural residents can receive every month is 491.74 yuan, and according to this standard, it will take at least 7.6 years to recover the cost.
Why is there such a gap?
In fact, it is mainly because of the difference between the social security system of employees and residents, and the payment amount and payment method of the two are different, which will lead to the difference in the pension treatment enjoyed by the insured personnel after retirement. Moreover, whether it is employee pension insurance or urban and rural residents' pension insurance, they all follow the basic principle of overpayment and long-term payment, so under normal circumstances, the enterprise personnel participating in the urban employee pension insurance will make their pension benefits after retirement higher due to the relatively high amount of contributions.
The most worth mentioning is that at present, the basic pension of enterprise retirees has established a normal adjustment mechanism, compared with the adjustment of the basic pension of urban and rural residents, it is not difficult for us to find that although the adjustment ratio of the latter is higher, but the amount of adjustment is actually relatively small; and the former although the overall adjustment ratio is only about 4% per year, but it can still rise dozens of yuan or even hundreds of yuan per month. Therefore, from this point of view, retirees who participate in corporate social security tend to benefit more.
epilogue
All in all, whether you participate in the basic old-age insurance for urban workers or the basic old-age insurance for urban and rural residents, you can receive a basic pension on a monthly basis after "retirement". However, it has to be emphasized that if the insured person wants to improve the level of basic pension insurance benefits after retirement, then the author's suggestion is to give priority to paying social security through the enterprise as a worker, followed by participating in the basic pension insurance for employees as a flexible employee. Therefore, in order to ensure that they truly enjoy a sufficient economic foundation to maintain their basic life in their later years after retirement, we recommend that employees of enterprises and institutions and flexible employees should not give up paying social insurance, after all, as an important part of the social security system, it is really important for workers!
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