Transitional pension refers to a kind of pension treatment calculated according to a certain proportion and formula for those who participated in the work before the implementation of the unified basic endowment insurance system for enterprise employees in the mainland and retired later. It is a component of the basic pension, in addition to the basic pension and personal account pension, it is also necessary to add a transitional pension to reflect the labor contribution of these personnel before the implementation of the new system.
The establishment of the transitional pension is to solve the problem of smooth connection between the old and new systems, protect the reasonable rights and interests of the middle group, and avoid the treatment gap and unfairness caused by the system reform. The transitional pension is calculated as follows:
Transition pension = indexed average monthly contribution wage× R× number of years of contribution before the threshold of the intermediary
Among them, the indexed average monthly contribution wage = the average monthly salary of the local employees in the previous year at the time of the retirement of an intermediary× the average index of his own contribution wage; R is the calculation coefficient, and its value is between 1%~1.4%, which is determined by local measurement; The personal payment period before the threshold of the intermediary refers to the personal payment period (including the deemed payment period) before the implementation of the integration of accounts and the establishment of individual accounts in the region.
Why adjust reissue?
Due to the different times for the implementation of the unified system in different regions, there are also differences in the calculation methods and standards of transitional pensions. In order to further improve the system and improve the level of treatment, the state issued the Decision of the State Council on Improving the Basic Endowment Insurance System for Enterprise Employees in 2005, which clarified the issue of transitional pensions and authorized provinces to formulate specific transitional measures.
In accordance with this decision, the regions adjusted and repaid the transitional pension. There are mainly the following aspects:
· The transitional pension originally issued according to the length of the insured person's deemed contribution period is converted into the deemed contribution account deposit, and managed in accordance with the individual account. This allows the insured to be clearly aware of their rights and interests and facilitates cross-regional transfers.
· The indexed average monthly contribution wages originally calculated based on the average monthly wages of local employees in the previous year at the time of retirement are adjusted to the average monthly wages of employees in the province in the previous year at the time of retirement. This would eliminate regional disparities and improve fair treatment.
· The original calculation coefficient R determined after measuring according to 1%~1.4% is unified to 1.3%. This allows the level of treatment to be improved and aligned with the pension calculation coefficient of the individual account.
· For persons who have retired and received a transitional pension, they are reassessed in accordance with the new criteria and formulas and the difference is repaid. For those who have not received or have not received the transitional pension in full, a lump sum replacement will be made in accordance with the new standards and formulas.
What are the benefits for corporate retirees?
The adjustment and replacement of transitional pensions have the following benefits for enterprise retirees:
· It can increase the level of pension benefits, increase income, and improve the quality of life. According to statistics, the national average monthly increase of about 140 yuan per person per person, and the cumulative amount of reissue reached 100 billion yuan.
· It can enhance the sustainability of pensions and ensure the long-term stable issuance of pensions. By converting the transition pension into a deposit amount in a deemed contribution account and managing it in the form of an individual account, the uncertainty and opacity of the transition pension can be avoided, and the security and trust of the pension can be improved.
· It can promote the unification and improvement of the endowment insurance system, eliminate the differences between regions, and improve the fairness of treatment. By calculating the indexed average monthly contribution wage according to the average salary of the province and unifying the calculation and issuance coefficient, the standardization and standardization of the transitional pension can be realized, and the loopholes and hidden dangers of the system can be reduced.
· It can increase the mobility and flexibility of the insured and facilitate cross-regional transfers. By establishing a deemed contribution account and managing it according to the individual account, the insured can clearly know their rights and interests, and can inquire and check at any time. At the same time, it can also facilitate the transfer of endowment insurance relationships between insured persons in different regions, so as to realize "endowment insurance as a guarantee, everywhere work is the same".
The historical background of the transitional pension is closely related to the reform of the mainland pension system. In 1995, the State Council issued the Decision on the Establishment of a Unified Basic Endowment Insurance System for Enterprise Workers, which put forward the basic principle of "combining unified accounts", that is, establishing a unified basic endowment insurance system nationwide, consisting of two parts: social pooling and personal accounts. This reform marks the transformation of the mainland from a multi-level endowment insurance system that simply relies on social pooling to a multi-level endowment insurance system that combines social pooling and personal savings.
The transitional pension policy does not apply to:
· Those who join the work after the implementation of the unified basic endowment insurance system for enterprise employees in the mainland and then retire are the so-called "newcomers". The pension benefits of this part of the personnel are composed of two parts: basic pension and personal account pension, and there is no need to calculate the transition pension.
· Those who worked before the implementation of the unified basic endowment insurance system for enterprise employees in the mainland and retired before the so-called "old people". The pension benefits of these personnel will continue to be issued by the original social pooling method, and do not involve transitional pensions.
· Persons who worked before the implementation of the unified basic endowment insurance system for enterprise employees in the mainland and retired later, but those who have not reached the statutory retirement age or have not accumulated 10 years of contribution years. These persons do not meet the conditions for receiving basic pensions, and can only receive a one-time old-age allowance and personal account savings, and do not enjoy transitional pensions.
Personnel who participated in work before the implementation of the unified basic endowment insurance system for enterprise employees in the mainland and retired later, but there are no persons who are deemed to have paid contributions or are deemed to have zero years of contributions. These persons do not have a pre-implementation contribution to the labour force and therefore do not need to calculate the transition pension. The deemed contribution period refers to the number of years that have not paid the basic endowment insurance premiums before the implementation of the new system, but can be recognized as continuous service or payment years according to national regulations. Generally speaking, only employees of state-owned enterprises and public institutions and some special groups (such as demobilized veterans, urban and rural knowledgeable youths, etc.) can be deemed to be paid, and other employees such as some private enterprises and private enterprises cannot be deemed to be paid.